Shariah Council of AAOIFI and Islamic Fiqh Academy — Mufti Taqi Usmani

Shariah Council of AAOIFI and Islamic Fiqh Academy — Mufti Taqi Usmani

Mufti Taqi Usmani explains the constitution and working of the Islamic Fiqh Academy–of which he is vice-chairman–and the Shariah Council of AAOIFI–of which he is chairman.

He explains the method of issuing fatwas and of drafting Shariah standards on auditing and accounting.

Mufti Taqi goes on to name the leading scholars in the field of Islamic Finance today.

Recorded at a training course on Islamic Finance conducted at the Centre for Islamic Economics, Bait al-Mukarram Masjid, Karachi, in conjunction with 1st Ethical.

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5 responses to “Shariah Council of AAOIFI and Islamic Fiqh Academy — Mufti Taqi Usmani

  1. Pingback: Austrolabe » How do international Shariah Boards work?

  2. Dr Gulam Mohammad Chinchwalker (Qadri)

    Respected Teachers.

    Banking and Islam

    (My Queries and deep sense of hamdardi for my muslim brother who are working in Bank and people who cant afford to start business or house due to financial problems)

    The bank and banking is view as a business organization working on interest .
    Since interest is haram in Islam the entire set up of bank and banking and employee working in a bank is considered Haram by Islamic Scholars.

    Riba (taking interest) A muslim is not allowed to take or give money on interest.
    Riba is one of the seven major sin in Islam and unforgivable in nature.

    The Ayat in regard to Riba came after Hijri to Yathrib , before this ayat many Shahabis including the prophet had taken money on interest from the Jew money lender.

    The Institute of Money lending business are harmful for those who take money from
    this money lender who lend money on very heavy interest rate and are very strict and unreasonable this money lenders give money on mortgage of land , gold and other
    valuable items .

    During Prophet time it was common observation that those who had took loan from
    these money lenders had to suffered miserably in hadiths it was said that the muslims should not become as cruel as this moneylender and should not give or take money on loan on interest Riba .

    Is Modern Banking and Money lender business of earliar time are one of the same or they are different ?

    Banking have one principle which is common with Money lender is lending money on interest but the Institution of banking in modern time is vast and very much different than the money lenders of earliar time .

    Banking Institution in modern time is an financial organization supported by the government and has been legalized and under the counter of RBI . Banking Institution has help the society at large in development in many field , unlike money lender business who use to charge heavy interest rate and were detrimental to the society at large .
    Modern Banks accept deposit from their client and pay them interest while the money lenders does not accept deposit they work with their own capital .

    Why bank is so important ?
    The prime reason whey most of the people all over the world keep money in bank is because their money are in safe their custody and are protected against robbery or other calamities. Many people have to save money for future they find bank more convenient as such keeps money in bank .Saving money in bank for protection is the main reason while the Money lenders does not takes deposit nor they guarantee or are trustworthy.

    QUESTION ASKED TO THE ULEMAS

    A. If a person want to keep money in conventional bank for safekeeping and not to earn interest is it still haram if he keeps money in bank and does not take interest.
    Bank is a legalized body and govern by the government of that country . Banking is an international body and respected by Government of all the countries most of the business through out the world are conducted through banking . Those who are in business of import and export find it convenient to do their business with bank .

    Businessman all over the world find it convenient to make a payment to the party through cheque, the bank accept cheque an transfer the amount of the depositor into the amount of whom the cheque is issued.. When can also obtain money through traveling cheque or through ATM he can also do shopping without paying cash through credit or debit card . Banking help a person to book his tickets on line saving time trouble and money .

    On other hand the amount of Interest involved in banking is very small compared to the interest charged by the money lenders plus money lenders does not provide all the facilities which a modern bank provides. If we can just consider that the low interest is not an interest but a service charge in compare to the services rendered . Bank give money to three class of people it give loan to the government , to business organization and to individual for personal need like housing , marriage , medical , education etc it is found that many who had taken loan are able to get benefit from this loan.
    Can Islamic Scholars take a liberant view and look with deeper insight may be it possible that the word interest would be view as services charges since the interest charges are not more than 9 to 10 percent annually .

    There is very narrow line and difference between usury and business . Usury is not permitted in Islam where as business is permitted for example if a person want to invest his money in business but other business man he can invest his money without actually being the part of his business yet obtain profit which is hallal , while a person give a another business on interest than it is haram .

    Islamic Scholars have no issue over the functioning on bank and the principle of bank except to Riba as Such Bank and banking is acceptable that is why Muslim financial institution are called Islamic Bank with similar function but difference in basic principle

    Islamic Bank : Now let us come to Islamic bank is there is any different between conventional bank and Islamic bank there is no difference in the objective and function of the bank.
    The major difference is the Conventional bank is it is Lending oriented while Islamic bank is Trade oriented .

    Islamic bank are profit /loss sharing method ( Mushraka ) secondly Profit mark up sale or rental method ( Ijara , Murabaha , B-Maujjol). In Islamic bank the customer is a partner to the bank and give right to the bank to do business on their behalf on their amount of deposit the business is subject to loss and profit which the depositor has to bear the bank take care to do business in such a way to insecure security and profit to the depositor.

    The Mutual fund banking by conventional bank are now more closer to the principle of Islam the money of the depositor in invested in mutual fund subject to market risk , some invest into most reliable and ethical companies and the profit or loss is shared. In mutual fund there is no interest involved it is free from riba . Most of the Scholars accept buying and selling shares , equity share with ethical business organization is hallal.

    Since in India Islamic Bank facilities are not available muslim has to keep their account in conventional banks for save custody , or to carry out their business buying and selling it is found that many muslim are having account in conventional banks at the same time keeping with the law of sharia many muslims do not take interest from the bank.

    Question to the Ulemas ;
    Is it fair and proper for a muslim to have an account in conventional bank without taking interest and only taking benefit of bank by paying fees for their services ?

    Now what is the status of muslim bank employees , bank employee is a commercial graduate whose job is to keep proper account and book keeping he keep the accounts of muslim as well as non muslim client . If a muslim client can have bank account than why a muslim cannot work in the bank when he himself does not take interest on his own saving in bank and he is honestly doing his duty .

    Question to Ulemas
    Can a muslim work in a bank ?

    It is found that many muslim do not treat employees of bank as muslim but openly avoid them and ill treat them is it fair , No one had ever told the bank employees in the beginning that they should not join the bank it is un Islamic now since they have already given up half of their life they are told to quit their job or face social boycott . In India where employment is so rare where muslim are denied job everywhere where would this people go only if they find some other job they would . Very few people or business organization are doing fair business in fact many business organization have taken loan or loan on interest if dishonesty is every where why target just bank employee because you know there is interest and in other business you do not know .

    Question to Ulemas
    Should we boycott and illtreat muslim who are working in bank ?

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