aoa all active members............

we know that in our country after the retirement peoples are buying the save deposit certificate or saving certificate if bank. and every month those peoples take 936 paki rupees intrest every month on one lac and those are saving money in bank for one or two hours , my question is that is islam allow the banking intrest.

any thing having intrest is haram i think there is no question abt that.. what we do and what we a supposed to do are two seprate things... my dear fella!

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BJ

1. Earning interest is not permitted according to the Shari'ah, and normally there are no reasons why a Muslim should earn interest. Muslims are required to use their money, funds and properties in businesses and investments that are compatible with the Islamic Shari'ah. Earned interest does not become a property of its earner because an interest-generating contract is not a means for earning. In other words earned interest is not yours and the principle is that you must return it to the person who paid it.



2. If for any reason a Muslim happens to have earned interest we must look at the ruling on returning it within the realm of the objectives of Shari'ah as well as the specific positions of the minute issue at hand. Earning interest from a person who sells Halal goods is different from earning it from a person whose business is to lend money on interest, especially banks whose basic and dominant activity is to earn interest from people with whom they deal.



Thus, retiring earned interest to a person (a bank is also a legal person) who makes his income from lending on interest, defeats the very purpose for which interest is prohibited and increases the power and income of those who actively spread the evil of interest.



3. Therefore, the ruling of the Second International Conference on Islamic Banking held in Kuwait in 1987 (may be earlier) which was attended by many Shari'ah scholars concluded that it is not permitted to return earned interest to conventional bankers; instead we must apply to such earned interest another Shari'ah rule that requires giving away to general charity any haram money, that happens to come under the hand of a Muslim (remember that it does not become a property of the Muslim, so it is not his), and it is better that such haram money should not be given to a Mosque just for keeping it clean of this dirty money (i.e. interest).


Donating Interest Money for Building a Mosque



4. Buying cars, houses and other properties on interest-based financing is also not permitted in the Shari'ah, and all Muslims in an area are required by the Shari'ah to establish financial institutions that provide financing on Islamically acceptable grounds. Actually, this is regarded as a fard kifayah (collective obligation) in nowadays since financing has become a necessary part of contemporary life.

Until such institutions exist, the First International Conference on Fiqh in the USA held in Oct. 1999 rightly resolved that for important things like housing for families who are in a dire need of them, interest-based borrowing is tolerated until Islamically compatible institutions are established.


May Allah guide us to the straight path, and guide us to that which pleases Him, Amen.

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ஜ иστнιπg ιš ιмթΘรรιвlε тσ α ωιℓℓιиg нєαят ஜ

every person know that when we open a account in any bank,the bank manager ask us did u submited the affidavit for zakat,islam says in every year we have wont to give zakat to yateems or poors,when we did not submit zakat affidavit then bank will deduct charges of zakat from your account,is that right or wrong,or if any thing having intrest in islam is haram ,those peoples are knowing about it then why those are saving money in bank.is that mean those peoples are taking intrest money from bank,those take money haram from bank?

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You are an eagle, flight is your vocation:
You have other skies stretching out before you.

AOA

In modern secular economic systems interest plays a very important role.
In Islamic jurisprudence the word used for interest is 'riba.'

There is complete unanimity among all Islamic Schools of thought that Riba is prohibited in Islam, as it appears explicitly in the Holy Qur’an.

The word riba has been used in the Holy Qur’an on several occasions. Riba means addition, increase. literally it means to increase, to grow to rise, to add, to swell. In the Shari’ah, “riba” technically refers to the premium that must be paid by the borrower to the lender along with the principal amount as a condition for the loan or for an extension in its maturity. In this sense riba has the same meaning as interest in accordance with the consensus of all jurists without any exception.

In several verses of the Holy Qur’an, Allah(swt) has mentioned the consequences of riba. The Qur’an did not declare the prohibition of riba in the early stage of revelation, rather we find that the complete prohibition of interest came sequentially.

In the Qur’an Allah (swt) says:

“That which ye lay out for increase through the property of (other) people, will have no increase with Allah: But that which ye lay out for charity, seeking the countenance of Allah (will increase): it is these who will get a recompense multiplied”. (30:39)

“That they took riba (usury), through they were forbidden and that they devoured men’s substance wrongfully – We have prepared for those among men who reject faith a grievous punishment.” (4:161)

“O ye who believe! Devour not usury doubled and multiplied; but fear Allah, that ye may (really) prosper.” (3:140)

“Those who devour usury will not stand except as stands one whom the evil one by his touch hath driven to madness. That is because they say: ‘Trade is like usury.’ But Allah hath permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge). But those who repeat (the offence) are companions of the fire, they will abide therein (forever)” (2:275)

“O you who have attained faith! Remain conscious of God, and give up all outstanding gains from Usury, if you are (truly) believers” (2: 278)

Prohibition of riba in the hadith

Jabir reported: The Prophet (saw), cursed the receiver and the payer of interest, the one who records it (the contract) and the two witnesses to the transaction and said, “they are all alike (in guilt).”

Jabir ibn Abdullah, giving a report on the Prohet’s farewell pilgrimage, said: The Prophet (saw), addressed the people and said, “All the riba al-jahiliyyah is annulled, the first riba htat I annulled is our riba, accruing to al-Abbas ibn Abdul Mutalib (the Prophet’s uncle).”

Abu Hurayrah (ra) narrated that the Prophet (saw), said: “riba has seventy segments, the least serous is equivalent to a man committing incest with his own mother.”

Abu Hurayrah (ra) narrated that the Prophet (saw) said: “”God would not allow four persons to enter paradise or to taste its blessings: he who drinks wine, he who takes riba, he who usurps an orphan’s property without right and he who is undutiful to his parents.”

Reference:

* http://www.shodalap.com/Interest_Zamir_I.htm
http://www.inter-islam.org/Prohibitions/intrst.htm

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'Thee woh ik shakhs kay tasawar saay - abb woh ranayee khayal kahaan'

"Islam permits increase in capital through trade. Referring to this, Allah Almighty says, “O you who believe, do not consume your property among yourselves wrongfully, but let there be trade by mutual consent...” (An-Nisa’: 29)

At the same time, Islam blocks the way for anyone who tries to increase his capital through lending on usury or interest (Rriba), whether it is at a low or a high rate, reprimanding the Jews for taking usury, even though they had been prohibited to do so.

Among the last revelations are the following verses of Surat al-Baqarah: “O you who believe, fear Allah and give up what remains due to you of interest if you are indeed believers. And if you do not, then be warned of war (against you) by Allah and His Messenger, while if you repent you shall have your capital. Do not do wrong and you shall not be wronged.” (Al-Baqarah: 278-279)

The Prophet (peace and blessings be upon him) declared war on usury and those who deal in it; he pointed out its dangers to society, saying, “When usury and fornication appear in a community, the people of that community render themselves deserving of the punishment of Allah.” (Reported by Al-Hakim; Abu Y'ala has reported something similar on good authority)

Judaism, prior to Islam, had also prohibited interest. In the Old Testament we read, “If you lend money to any of my people with you who is poor, you shall not be to him as a creditor, neither shall you require interest from him.” (Ex. 22:25)

As for Christianity, the Gospel according to Luke reads, Give away to every one who begs of you, and of him who takes away from your goods, do not demand them back again. (Luke 6:30)

It is, therefore, sad to see that the Old Testament has been subjected to such distortions that the meaning of "my people," which originally had a broader application, later became restricted to the Jews alone, as we read in Deuteronomy, You may lend on interest to a foreigner, but to your brother you shall not lend on inters". (Deut. 23:20)

The wisdom behind the prohibition of interest

The strict prohibition of interest in Islam is a result of its deep concern for the moral, social, and economic welfare of mankind. Muslim scholars have sound arguments explaining the wisdom of this prohibition, and recent studies have confirmed their opinions, with some additions and extensions of their arguments.

We confine ourselves to what Imam al-Razi says in his tafsir of the Qur'an:

First: The taking of interest implies appropriating another person's property without giving him anything in exchange, because one who lends one dirham for two dirhams gets the extra dirham for nothing. Now, a man's property is for (the purpose of) fulfilling his needs and it has great sanctity, according to the hadith, “A man's property is as sacred as his blood.” (Reported by Abu Na'eem) This means that taking it from him without giving him something in exchange is haram.

Second: Dependence on interest prevents people from working to earn money, since the person with dirhams can earn an extra dirham through interest, either in advance or at a later date, without working for it. The value of work will consequently be reduced in his estimation, and he will not bother to take the trouble of running a business or risking his money in trade or industry. This will lead to depriving people of benefits, and the business of the world cannot go on without industries, trade and commerce, building and construction, all of which need capital at risk. This, from an economic point of view, is unquestionably a weighty argument.

Third: Permitting the taking of interest discourages people from doing good to one another, as is required by Islam. If interest is prohibited in a society, people will lend to each other with good will, expecting back no more than what they have loaned, while if interest is made permissible the needy person will be required to pay back more on loans (than he has borrowed), weakening his feelings of good will and friendliness toward the lender. (This is the moral aspect of the prohibition of interest.)

Fourth: The lender is very likely to be wealthy and the borrower poor. If interest is allowed, the rich will exploit the poor, and this is against the spirit of mercy and charity. (This is the social aspect of the prohibition of interest.) (Tafsir by al-Fakhr al-Deen al-Razi, vol. 7, p. 4.)

Thus, in a society in which interest is lawful, the strong benefit from the suffering of the weak. As a result, the rich become richer and the poor poorer, creating socio-economic classes in the society separated by wide gulfs. Naturally, this generates envy and hatred among the poor toward the rich, and contempt and callousness among the rich toward the poor. Conflicts arise, the socio-economic fabric is rent, revolutions are born, and social order is threatened. Recent history amply illustrates the dangers to the peace and stability of nations inherent in interest-based economies."

SOURCE :- Group of Islamic Researchers

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Devil-may-care

Riba: the personal dilemma




As a Muslim who bows his head to his Creator it is a serious question: How to obey Him? In a world that revolves around interest (Riba). A world that runs on it. Banks, financing, mortgage, all involve interest. There are millions of Muslims and non-Muslims who live without interest. This article discusses practical ways of living a successful life here without compromising success in the hereafter.

1. Interest from Credit and credit cards

Credit cards are the pillar of consumerism. They are also based on a system of interest-buy now, pay later, and the later you pay, the higher the interest.

I suggest that you send your credit card back to the company in two pieces.

If you still owe money, they will continue to send you bills. Plan now to make a final payment soon. Pray that Allah liberates you from this burden.

If you are sure that you must have a credit card, pay the bill in full as soon as you receive it. If you wait for the due date, it is likely that you will forget once in a while and end up paying interest on it. Since interest is forbidden, we must avoid it.

A Muslim forgot to pay his bill on time and ended up with finance charges on the next bill. He called the service representative, saying that he had always paid his bills in full and on time.

This was a mistake and he wanted the finance charges removed. It did not not take long for the service agent to check his record and delete the finance charges.

Another Muslim whose request for the same thing was denied, wrote a letter explaining that he had paid his bills on time in full for the last seven years. An excellent credit history.

He said: If you cannot remove the finance charges which I have incurred this time then maybe I need to take my business somewhere else. He made it clear that his position on interest was not to be compromised. With his letter he enclosed his Mastercard in two pieces. Within three days he received a call from the card issuing company consenting to his position.

They sent him a new card with the same credit line as before. Although the credit card contract obliges you to pay interest, your credit history helps you to take a stand for your belief.

2. Bank Accounts

Banks are the center of the interest-based economy.

Conscientious Muslims opt for a checking account instead of an interest-bearing account. This is also the reason why Islamic organizations and Masjids meet their banking needs through checking accounts. Certainly the bank is benefiting from your money but this is a compromise and you have little choice.

Although there are 50 Islamic banks offering banking services in 23 countries, including a few Western non-Islamic banks which have Islamic windows, none of these banks are available in the United States yet.

It is interesting to note that one in five American families, i.e. 17 million families, do not have a bank account. If they receive a check they cash it through a currency exchange. If they have to pay someone they get a money order from the post office. A majority of people in the world, in fact, live without a bank account.

3. How to deal with the interest you already own

If you have an interest-bearing account which you would like to close now, or the IRS has sent you a check with interest, or you owned a bond and you want to sell it now to get away from interest. I congratulate you on your decision.

Give the amount of interest to any poor person. Do not spend a single penny on yourself.

It is Haram for you but not for the poor and the needy. Some Masjids have a special account to dispose of this money for the poorest of the poor. Although some scholars recommend leaving the interest money in the bank, I would not give the banks one penny. True, it is not my money. But it is not theirs either.

4. How to deal with the interest which you owe

One Muslim was asked to pay interest by the IRS because of some problems on his tax return. His secretary told the auditing agent that her boss neither paid nor took any interest since he was a Muslim. The secretary was a non-Muslim who knew the Islamic position. When the secretary remained undeterred on the issue of interest, the IRS agent asked if she could give any references. She showed him the book which contained the Quranic verse prohibiting interest.

The IRS agent had to consult his supervisor-Guess what? He won. Well, the secretary won since the boss didn't know yet what a fight she-a non-Muslim secretary-was putting up with the IRS, knowing the belief and character of her boss. He did not have to pay interest to the IRS on religious grounds.

A Muslim physician was charged interest on a construction job because he inadvertently delayed payment of the bill for one month. He wrote to apologize for the delay and informed the authorities that Islam did not allow him to pay or receive interest on any transaction.

Not only were the interest charges removed, but an opportunity for Dawa came up. Taking a stand with sincere motives pays in this world and in the world to come.

If you owe interest through a legal contract, get out of the deal by paying off as soon as possible.

Dua, budgeting and planning is important in achieving this goal. There are thousands of Muslims in America who have done this. You are not alone. Allah will give Barakah in this right decision. The hardship you will go through because of this decision will be, Insha Allah, a sort of purification to seek Allah's forgiveness of past mistakes.

5. Buying a house

Owning a house is the American dream.

But the fact is that about one in three families in America, or 28 million families, do not own a house. Buying with financing is an option made easy since everyone does it.

It is not only Haram to buy anything through interest-based financing, it is, in many cases, non-economical and bound to lead to headaches. Hundreds and thousands of people lose their houses every year since they spend before they earn through the financing system. And when you lose in attempting the American dream, you lose big.

You even lose what you had already paid for.

So why not think of not losing on the Day of Judgment by opting for a simple life here.

I know a Muslim sister who, before accepting Islam, used to be a real estate agent and was married to another real estate agent. She not only lost her dream hose but suffered the breakup of her marriage as well. Now a Muslima, she lives in a mobile home in a mountainous countryside. She now deals in interest-free real estate transactions only. She feels that her life is simpler and more comfortable now.

Ask yourself these questions

Non-financing options are difficult but possible. However, do ask yourself some hard questions before you decide to buy a house:

Is it absolutely necessary that you buy a house even though you cannot afford it?

Is it necessary to buy a house which is beyond your means?

Is it wise to pay four times the amount of the actual price of the house just to own it now?

Is it not cheaper and headache-free to live in a rented apartment than to own a house where you do not have to worry about snow shoveling, lawn mowing, repairs, rising property taxes, etc.?

Have you made a budget for yourself?

Are you sure you are going to keep the income which you are counting on to buy the house?

Do you have enough of a financial cushion for any and every emergency?

After this analysis, if your answer is still yes, you must buy a house, then consider some of the interest-free options.

Make a budget which will allow you to save more money. Involve every one in the family in the process of saving money. The more money you can give as down payment, the better your chances of a contract which doesn't involve financing.

Do adequate research before you end up with any real estate agent. Read books about it. Seek friends' assistance who have bought houses without mortgage.

I know people who own good houses in safe neighborhoods for as little as $10,000 and $20,000. They were able to find good deals because of good
research.

As well, their firm anti-interest commitment made them look harder into other options. One of the neighbors told a new homeowner that he wanted to buy the same house for a long time but could not figure out whom to approach. The house had been advertised for six months in a newspaper. Information is certainly power.

HUD homes

Housing and Urban Development (HUD) houses are announced at least twice a month by the federal government for auction. They are good houses, which you can buy at 50 to 60 percent below market price.

In Chicago, where median price of a single family home is $116,000, I know at least six people who have bought their houses in the $10,000 to $30,000 range with three bedrooms and a 2,000 square foot lawn.

If you can save enough money or can get an interest-free loan for two or three years through friends and relatives, you can buy a house for cash. Buying for cash makes your offer more attractive to some sellers. You will be able to get a better deal.

One Muslim I know was able to reduce the asking price by 14 percent because of his cash offer. Since it is a buyer's market, you may be able to get an even better deal. Muslims have developed informal co-ops in which six or seven families help one to buy a house on a cash basis. They develop a personal loan contract among themselves, with witnesses and signatures.

Most of the Masjids and schools in North America are purchased without interest through collective purchasing power and good negotiation. Some Muslims have purchased apartment buildings similarly and in turn have offered them to trusted Muslims and friends on interest-free installments. Many of them, with common consent have turned the basements into a Masjid and school.

You can save the money to afford a higher down payment with a contract to pay off the rest within two or three years without interest.

The Bottom Line

If we consider Allah's Guidance to be essential for success in the Hereafter, then the struggle to stay away from interest despite the prevailing system is our way of achieving Allah's pleasure. I agree that it is difficult. But Allah promises Jannah in the life to come which is everlasting.

The example of this world compared to the world to come, as the Prophet (peace and blessings be upon him) said, is like a drop of water to an ocean.

__________________
You are an eagle, flight is your vocation:
You have other skies stretching out before you.

AOA dear forum members

As from above posts, all of us agree that RIBA (interest) is prohibitted in Islam. My question is;

WHAT IS THE SOLUTION TO END THIS SYSTEM IN PAKISTAN?

Remember that Pakistan was made in the name of Islam only.

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The Demand Of Faith Is To Bow Down After Hearing The Command. Faith Cannot Co-Exist With Ifs And Buts.

One view is that banking circumscribes those branches of knowledge that facilitate trade within the physical limits of the universe – the place or parameters entrusted to man as khalifa. This view means that in the olden days before commerce as we know it, some kind of banking or trade facilitations may have been part and practices of centres of concentration of human dwellings that remained connected through trade.

We, as Muslims, believe in the flow of knowledge from God to man through divine revelation to guide him on the right path. Let me quote one incident in recent history. When riba became a practice of Israelites, it was forbidden through commandments revealed to Moses. But they observed relaxation in implementation of the code and riba traveled with them wherever they went. Allah, in his greater wisdom, (hikmat and destiny) did not punish them en bloc as happened with many ummahs who transgressed in the past till the last of the Prophets (PBUH) was born in Mecca. He placed before all mankind the eternal message of Allah. At Arafat, when he performed Haj, He among delivered the message of Allah:

Prohibiting riba

Leave forgive and forget all past riba

Transfer responsibility to the ummah to spread his message to all of mankind for the rest of time.

The message in physical terms means and includes a state of Islam circumscribing one man to all mankind in relevant time and space to practice one deen jointly as well as severally and beyond. At the time of his death he left behind ‘The Book’ and ‘His example’ to guide and keep Muslims on the right and desired path. This then is the gene of globalisation and what he left behind, contains a complete code command and solutions to problems of Muslims for all times.

With this very brief introduction, let us move a small step forward. The systems of trade facilities of the relative past had disappeared. They were not deep and did not answer the problems nor solve the difficulties that later developed; they had limited application and also included riba, an element of a practice that was forbidden. The history of man in the relevant time and space as available in Qasas-ul-Quran is the whole truth and not the account collected, unearthed and drawn from faulty and vague human memories. The books especially regarding the economic aspect will need a complete re-writing after riba is forbidden in Muslim states in accordance with the injunctions of the Holy Quran. It is the law of the lands that provides riba a safe haven to flourish and many may face questions when times change.

Some websites mention that the Arab world became aware about the prevalence of riba of today in 1870 when digging of Suez started and Anglo French Banks came to Egypt. Their reaction was: “No riba and riba free banking.” The obvious observations are: (i) For centuries Arab scholars had worked on riba in trade. What was their reaction to banking? It seems more likely that they had some concept of banking or trade practices, but had not given a proper name to describe this cluster of activities. It is more likely that for this reason they started developing products on the trade side to replace riba. This was a knowledge based exercise, not an economy based one as oil had not been discovered until then. It was in 1908 that oil was discovered in Kuwait and used to lubricate and drive the European war machine, while the Suez enabled them to maintain an iron clamp on India and beyond. Then came the commercial use of oil and so far limitless wealth of Arab rulers and Arab nationalism – partly a result of commercial activity influenced from various centres and even for other reasons.

As regards our part of the world, the slaves, it was ruled by a combination of European swords, colonial wisdom and local disorder. A very significant event was establishing Fort William College at Calcutta. Surprisingly the entire British commercial law was enacted from 1800 to 1900, also creating a large number of local knights. Mohammad Iqbal was the one who chose to return the honor. (The foregoing requires complete research which may be revealing). The Bank of Bengal was established in 1809 and one at Bombay in 1840, The cooperative movement was instituted in 1904 and the Reserve Bank of India in 1935. The atmosphere was slowly filled with branches if British banks. Consequently riba and banking spread to completely command the economic scene.

Then Allah provided a safe haven to Muslims of this part of the world and Pakistan came into being. In 1947, the founder father of the nation declared opening of the State Bank of Pakistan – encompassing Banking as per the law of the land. But he made it clear that it was the duty of the State Bank of Pakistan to arrange comprehensive research into the subjects of banking and economic system of Islam and to prepare/draft that system to be implemented in Pakistan.

An effort has been made to trace the path of history and travel through a part of the Holy Quran to trace the roots and requirements of some concepts. We know that no new knowledge has been revealed by Allah after the departure of the Prophet (PBUH). Whatever exists today appears to be borrowed from Al-Quran and used by mixing forbidden practices of past pre-Islamic days. Secondly, a banking system in Islam lies resting in the books of the history of Islam and needs to be discovered.

Let us trace the British time-line of riba based banking from 1.7.48 to the Dark Ages as described in dictionaries of Banking and Finance and the Encyclopedia Britannica.

1500 Discount market of discount houses facilitating fund flows by borrowing

1400 Middle ages. Jewish goldsmiths

1300 Extending prohibition of riba to Christian faith

1311 Pope Clement V following a debate of over 1000 years (History of Usury Prohibition). Christians hanged for practicing usury.

1200 Presence of Italian banks in England.

Dark Ages

This Information is evidence to the following;-

||-- Deposit function does not have roots in England.

||-- Banking existed in England during the period approximating the Dark Ages. The banks were Italian. Therefore we need to trace the origin of banking in Italy.

||-- Banking is not lending which was a business of goldsmiths.

||-- Banking means acceptance of deposits of money only.

||-- This was the basis of banking in Italy.

||-- There is no mention of riba in this definition.

We may conclude that the British banking disappears into darkness. This is why their economic history fails to answer questions on the origin of banking.

Let us follow the cycle of Islam regarding economic development. From Adam (AS) to the period before Mohammad (PBUH) we can trace and deduce from the Holy Quran evidence of trade circles in limited spheres. Thereafter there emerged regular travel routes from Mecca to Syria and Yemen. If we make a deeper probe, it coincides and appears as a direct answer by Allah to the prayers of Hazrat Ibrahim (AS) that he pleaded for while obeying the command of Allah to leave his son and wife in Mecca. These trade routes then get linked up to other trade routes connecting the then known world. These customs of trade followed a process called Bai allowed by Allah. This was based on cash or credit and later developed to be supported by Modarbah or Musharkah for expansion or to suit events and circumstances. In this process riba also entered the scene and gradually became the most important factor. As Islam spread in Mecca and Madina, Allah sent his message through his messenger (PBUH) to leave this practice. The financial system of Islam then was trade and agriculture and related professions and their produce. This has been shown in Fig-1 with the coming into existence of the state of Madina, following components that appeared on the economic scene to support and sustain an expansion of the Islamic state under the Holy Prophet (PBUH).

||-- Bai, Agriculture related professions and produce

||-- Addition of Modarbah, Musharkah Amana

||-- Further addition of Sadqat Ghaneemat

||-- Further addition of Zakat: voluntary contributions

||-- Setting up of Bait-ul-Mal

||-- Regulation of functions of this institution by Divine order

||-- Regulation of trade and commands to eliminate riba

||-- Expansion of state of Madina to the whole of the Arab Empire

||-- Total prohibition of riba

||-- Responsibility of the ummah expanded to the end of time and space and the last of mankind.

||-- Completion of deen, its codes in all respects.

||-- Death of the Holy Prophet (PBUH).

That was the termination and end of the institutions of Risalat and Nabowat. This was followed by the Khilafat.

The Islamic state continued to expand and so did its trade and economy and the components mentioned above. However during the days of Umar-Ibne Khatib as the Caliph, a financial product was put in place by Zubair bin Awam by combining credit and amanat to support expansion of trade. This product gained support of the Ashab-e-Rasool. Some even may have joined by adopting this practice (The words are very carefully chosen). The qualities, features and facilities circumscribed by this function resemble those of deposits of today.

Their activities thus became like those of large trading houses supporting their activities by deposits. The persistent and continued use of this financial technology cannot but be termed as ‘Banking Gene’.

As the state further expanding and so did trade and economy, the product needed support of other branches of knowledge such as:

||-- Arithmetic

||-- Accounts – Sector wise books

||-- Document development

||-- Expansion of Musharkah and its variations

||-- Many other support mechanisms

While this process moved forward it was helped by certain decisions of the Khalifas and their companions.

||-- Merging currency into a single coin

||-- Not agreeing to proposals of paper currency or leather currency

||-- Transfer of funds from one Bait-ul-Mal to other

||-- Lending from Bait-ul-Mal for trading activities, etc.

||-- Large scale economic activities such as canals, madaris, copying the Holy Quran, education, etc.

||-- Completing the cycle of an Islamic welfare state

Let it not be all praises. Yes the fact is that the later role of the Bait-ul-Mal was diverted in a questionable manner. Thus for this, as also other reasons, the new banking functions found safe passage in the private sector and by the time all the above functions were developed almost 100 years had passed. It was thus for Abu Hanifa (RA) to fully operate expand and implement the banking function. Thus he was the first man in the history of Islam to have enviisaged the full range of banking and thus established the principles that are the basis of Islamic banking today. “Banking means acceptance of deposits of money only for the purpose of investment or lending that can be withdrawn by cheque –”

No doubt in the practice of the above components, he only followed the Holy Quran and Sunnah and his vision of both was far superior to that of people today for obvious reasons (Fig-II) (CF Abu Hanifa ki Siyasi Zindagi - Manazir Ahsan Gillani)

In the foregoing we have traced roots of four kinds of banking and the banking gene. These can be described as;

Banking: Riba based banking practiced after middle ages. This is not our role model for obvious reasons.

Interest Free Banking: Conventional banking minus interest. But it still continues to include practices not permissible in Islam. This experiment has failed.

Islamic Banking: By creation of products (compatible) for continuity of the system.

Muslims have not responded positively to this mode as well. Now that we know banking, as it is available in Islam, it will be all the more difficult to follow this. Abu Hanifa (RA) a man of much deeper and wider vision did not improvise any of the standard practices. People engaged in this exercise may match their substance with his concepts. We need not come in this picture.

Banking in Islam: It is believed that the aim of this article was to find this fact. It is placed for consideration of the reader.

Although this is the end of Article, I shall be failing in my duty as a researcher if I do not answer the main question facing us today:

Where to start?

Why start with currency?

Riba is in the currency issue

All products are woven around currency.

Other un-Islamic element routed through currency.

Exchange rate problems.

Shifting dealing from currency to accounts.

All Muslims to open accounts to benefit from the Bait-Ul-Mal. (or discharge of duties of the Bail-Ul-Mal)

AH accounts Islamic digit based.

Complete documentation.

Change to Islamic currency gradually.

... ...

The writer is a former Advisor Banking, State Bank of Pakistan. This was written for the Institute of Chartered Accountants of Pakistan – Karachi.

http://thepost.com.pk/vis.aspx#Position

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" Woods are lovely dark and deep But i have promises to keep And miles to go before i sleep "

To claim that banking was not possible without interest has been proved baseless even in a report of the State Bank of Pakistan. The report informs that ‘interest’ was just one of the many instruments of banking; and 12 substitutes of interest were indicated. The various Commissions constituted by the past governments to suggest alternate modes, have provided detailed structural designs. But none of the governments was really serious to implement these recommendations which in fact, was necessary to understand what were the difficulties by way of introducing the interest-free system. One of the main reason not to implement the proposed interest-free schemes, has been that the privileged ruling class brings in soft loans worth billions of dollars on concessional terms and further extends it to public on exorbitant rates. The interest capital thus accumulated is transferred to the foreign banks accounts of these ‘Black and White" masters. Currently successful experiments have been carried out in various parts of the world including Kuwait, the Emirates, Sudan and Iran to eliminate ‘interest’ from the economy. Interest-free Banks are already working in Malaysia, Kuwait and Emirates. Al-Baraka Bank has an arm in Lahore also and that provides interest-free venture capital. Interest-free business based on profit and loss proves beneficial in the long run, particularly when business environment is healthy and proves absorbing periodic shocks better than the interest system currently in practice.

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You are an eagle, flight is your vocation:
You have other skies stretching out before you.