Sha'ban 27, 1438 A.H
Wednesday, May 24, 2017
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  You may ask Shariah related queries from Mufti Javed Ahmad (Resident Shariah Board Member) or our Shariah Department. Please email your queries to shariah@bankIslami.com.pk
   
 
 
 
  The Islamic financial system is a wide subject and cannot be understood through an e-mail only. You may require to study many books and article on this subject to grab some of the gist.

However, to answer your query I am writing some points:

1. Banking is all about intermediation through providing money on the basis of "Lending on interest". So Conventional banks do not provide money except on the basis of interest they charge from the person/company, and for that reason these banks do not bear any risk (financial risk, business risk and natural risk etc.). They simply charge some amount over and above what they have loaned, irrespective of whether the borrower has faced a loss or not.

2. Coming to Islamic banking, one thing is very clear about Islamic banks: they do not provide money to customer because charging any excess amount over the principle is "Interest" which is Haram and impermissible in Islam. So if they provide money to customer and charge some amount over and above it it would be Haram, and if they provide money and do not take any thing then how would they earn money and give  return to their depositors? This is the main point to understand the gist of Islamic banking.

3. To deal with this issue two opinions are there: One is that Islam does not provide any solution to replace present day Conventional banking system. Second is that being a last religion Islam certainly provide solution to replace the existing un-Islamic system.

4. Those who do not have sufficient knowledge about present day economics and economic instructions of Islam are normally of the first opinion and they do not trust in any thing and effort made to develop an Islamic financial system. Very frankly I am not able to understand philosophy of these people. Because if all struggles towards establishing an Islamic financial system and its betterment are wrong then how would it be possible for Muslims to have an Islamically accepted economic system? Certainly some efforts can provide Islamic economic system and there should be a start to bring about real system in running.

5. Islamic banks perform generically three type of financing: a)Trading, b) Leasing / rental services, c) partnership. Each mode of financing has other different types under its domain. a) Murabahah, b) Salam, c) Istisnaa, d) Musawamah are kinds of sale. Ijarah is Islamic leasing and a) Mudarabah, b) Musharakah, c) Musharakah Mutanaqisah (Declining Musharakah) are kinds of partnership. Islamic bank perform these kinds of operations to generate revenue. If it is a sale then they charge some profit on goods they acquired and sell it to customer. So Islamic banks generate their profit from means that are permissible and authorized by Islam.

6. Another important feature of Islamic banking system is that this is an Asset-Based financing system which means there is no concept of merely lending of money with no consideration of assets. Instead, it is mandatory to have some specified and quantified assets transfered to customer in financing.

7. Second important feature is risks and rewards distribution which means Islamic bank can not put themselves in isolation from the risks built in in a transaction. For example if there is a transaction of Islamic leasing (Ijarah) then it is mandatory for lessor to bear ownership related risks, he can not refuse to bear these risks, and in consequence of it when an Ijarah agreement takes place Islamic bank do not start charging rentals immediately after agreement, they start charging rentals after delivery of assets. On the contrary conventional leasing companies and banks start charging rentals immediately after agreements.
 
 
  Conventional banks with Islamic windows operate under the supervision of a Shariah scholar. Therefore, the way they finance is acceptable and Shariah compliant. For other details, you should preferably discuss this with the concerned bank as we do not have access to its background documents and structure of the products.
 
 
 
  What you have perceived from different sources is incorrect. In fact, Conventional banking transactions have two elements of wrong nature, 1) Riba (Interest), 2) Impermissible ways of contracting and performing business. To explain what I want to say look at the banned activities, they are of two kinds: 1) Lending of money, 2) Asset based-financing or service provisioning. Lending on interest is absolutely Haram without any doubt. While doing asset-based financing, element of interest goes off but second element does not go aside and it makes the transaction void or impermissible.

Leasing transaction of Conventional bank does not have element of Interest but the way the transaction is structured is not according to Shariah. As per Shariah, there is distribution of risk and reward (or rights and responsibilities) for owner and lessee. But no such mechanism is there in Conventional transactions. They treat all such transaction as money loaned to customer and keep ownership of the asset as security.
 
 
 
  Sleeping partner can take profit if it is earned through HALAL ways and the mechanism of distribution of profit is according to Shariah. Sleeping partner deserve profit since he has invested his own money.
 
 
  The Bank invests the money in many areas [sometimes exceeding 100] and practically speaking it is not possible to tell you where your amount has gone, your amount gets merged with other amounts and invested in any Halal area.For knowing the avenues the Bank has earned from, you may refer to Shariah Compliance report published in our Annual balance sheet every year.
 
 
  Weightage system is based on Time and Quantity. If you deposit Rs. 10,000/- with BankIslami it will see two important factors before assigning you a weightage. a) The time you deposited this money for, and b) The quantity (which is 10,000). The logic behind it is that when you deposit an amount for a longer period it becomes easy for a bank to invest this money in big and long projects, similarly if you deposit big quantity of money it becomes easy for banks to invest in huge projects. The amount deposited for a short period cannot not be invested in big and long projects and it may be utilized for only short term projects.
 
 
  Islamic banks invest money received from depositors in profitable areas utilizing the Shariah compliant modes of financing like Murabaha, Salam and Istisna' being trade-based modes, and Ijarah (Islamic Leasing) and Musharakah and Mudarabah (Profit Sharing modes of investment). Banks distribute their income (whatever a bank earns through these modes of financing) between itself and the depositors on the basis of profit-and-loss distribution mechanism.

This detail makes it very clear that Islamic Banks can not give fixed return on deposits because they do not earn fixed income. A famous book written by great Islamic scholar Hazrat Maulana Muhammad Taqi Usmani namely "An introduction to Islamic Finance" may help you a lot in understanding the basics of Islamic financial system.
 
 
  BankIslami's profit & loss system works on the basis of Mudarabah where depositors are Rabul Maal (fund providers) and BankIslami is Mudarib (fund manager). The profit is shared between them according to the mutual percentage they agree at account opening.

BankIslami invests money in almost all business sectors provided their business is not violative of Shariah rules. BankIslami invests money through Trade, Rental and participatory modes of financing.
 
 
  By opening an account with an Islamic bank you became Rabbul Maal (the fund provider) and the bank becomes Mudarib (The manager). As per the laws of Mudarabah, Rabbul Maal is the Owner and Mudarib is the Managing partner. This type of partnership restricts non-managing partner, who is Rabbul Maal, to interfere in business matters. He has the right to withdraw his funds if he is not satisfied with the performance of business.
 
 
  Min deposit for MAHANA MAUNAFA ACCOUNT is Rs 10,000 and tenor is one ,two ,three and five years and you get profit on monthly basis. For it you will have to open an account of Saving or Current. Then you will fill request form of Term Deposit , in which you will mention tenor in which you want to deposit your amount. If you want to deposit Rs 100,000 for one year , according to profit rate of last month (say 7.36 %),you can get Rs 613 per month & after one year Rs 7360. On Rs 40,000, you can get Rs. 245 per month and Rs. 2944 after one year.

The Profit will be credited in your Saving or Current A/C on monthly basis ,and you can use it by ATM card and Cheque Book and you can operate this A/C as a normal A/C.

You cannot add or take out any amount from this MAHANA MAUNAFA ACCOUNT. If you want to withdraw any amount from it then you have to book remaining amount again.
 
 
  Yes , it can be utilized to perform Umrah.
 
 
 
 
  Musharakah units are of fixed price at the time of signing the Diminishing Contract.
 
 
  Islamic banks do offer BTF which means Balance Transfer Facility. Under this facility you you can pay off your current outstanding towards any Conventional financial institution and obtain finance from Islamic banks.

My advice to you is to contact our bank for this facility and see what is possible for you. In fact, current rate of financing is a bit high and Islamic banks also offer a high rate. However you should avoid interest as it is one of the highly prohibited things in Islam.
 
 
  Nothing like this happens in Islamic banks. In fact, Islamic banks give to their customer a range under which they move up or go down, for example they give customer a range of say minimum 11% and maximum 16%. They do not go above 16% and below 11%.

Secondly, Islamic banks do not change rate before the timeline they give to customer. For example, if they say that they will change the rate after 6 months they will not change it before this time no matter the market rate goes up after two months.
 
 
  Monthly installments is based on rental + unit price. Rental rate could be a real market rate (which is usually 5% p.a) but in this case customer has to share in real appreciation in value of property and the unit price will change every six month or year. In fact two possibilities are there: (1) payment of high rental (with a fixed agreed upon rate or linked to a benchmark) + pre-determined fixed price of property (units price), (2) payment of rental according to market rate + market rate of property (units with market price). First option is acceptable to both bank and customer and the second option is obviously difficult for customer. Therefore Islamic Banks do offer product this way and this is not a hidden way of charging interest.
 
 
  House, in case of Housing Finance, is jointly owned property of the bank and the customer. In case of major maintenance (damages) both will share on pro rate basis.
 
 
 
 
  At the end of IJAARAH, the leased asset is offered to the customer for purchase against the Security deposit he deposited. Through a separate agreement the asset is sold to him against the deposit.
 
 
  No, here two agreements are not merged in one. In fact, both agreements are independent of each other. The sale happens after completion of Ijarah through a separate agreement. Merger of two agreements in one means two different agreements become merged in one not two different agreements signed together.
 
 
  Yes, Car Financing of Islamic banks is Halal since it is structured on the basis of Ijarah which is an Islamic mode of financing used for renting out assets against consideration (rent). For detail just visit any of our branch and get a copy of {Ijarah & Car Ijarah brochure} in which we have explained this thoroughly.

Conventional Insurance is not Halal, a new way of insurance "TAKAFUL" has been introduced which is structured Islamically. This way of insurance has been introduced by Islamic scholars after extensive research and study. BankIslami always goes for Islamic insurance or TAKAFUL.
 
 
  First of all, Islamic banks do not lend money, they invest money in profitable areas. Secondly, Islamic banks open up their floor through Housing and Car finance for everyone who needs any financial assistance for these needs to be satisfied. Islam does not encourage taking loans for something that is not your need. Holy prophet (SAWS) has himself taken loan from people for his needs.
 
 
 
 
  Recovering amount given to a customer depends on the mode of financing utilized. If the mode of financing is Mudarabah or Musharakah then the loss to business would be as per financing ratio. But if the mode of financing is any kind of sale (Murabahah, Salam or Istisnaa') then the dues on customer are recoverable in full, no matter he suffers a loss or not. For example if Islamic bank sold an item to customer for Rs. 10,000/= and this thing destroyed after some month or its part went dysfunctional then this will be of the customer and not of the bank. It is very logical and we see it in our everyday routine life.
 
 
  Late payment charges are not allowed in the opinion of the majority of Ulema. However, keeping in view current business needs for avoidance of late payment, Ulema have allowed imposing Forced Charity under which the delaying party has to pay a sum (agreed upon in terms of % or fixed amount) which will be given to charitable institutions. This amount must be used as charity and the receiving part can not take it into their income account.

Keeping in view the crucial need for such a mechanism I think this would be acceptable and according to Shariah.
 
 
 
 
  Bill purchase does not mean Bill discounting nor it means Purchasing of Document (Bill). It is an arrangement for Bill discounting through currency purchasing (in case of sight) and providing Murabahah for purchases keeping Bill as security (in case of Usance). The method for currency transaction is that the bank enters into an agreement of sale and purchase of US$ against Rs. The customer sells the US$ to the bank which is deliverable in future at a specific date (usually the same date on which the payment is to come.) The bank pays the price for the US$ in Rs (with necessarily current spot market rate and not a future rate) by crediting the account of customer. At the receiving of payment, the Bank adjusts the receivables (US$).

You should however keep two things in mind: One is that the Currency arrangement is purely based on Fatwas from Ulema in Pakistan. View of Arab Ulema is different on the issue and they consider Currency transactions as 'Ba'i us Sarf' under which price and subject matter are to be transacted at spot and none of them could be postponed for future. Therefore, they do not allow this arrangement for Bill Discounting.

Secondly, Ulema in Pakistan have allowed this arrangement for extreme need in this field and unavailability of any substitute but this arrangement has not been allowed by any board for FX operation of Treasury. Murabahah arrangement for Usance is only practical if customer needs financing for further purchase of inventory, but in case of his need for administrative expenses the arrangement is not practical.
 
 
  Working Capital finance facilities could be provided through Murabahah (for Inventory and Supplies, and not for Administrative expenses) and these facilities could also be provided through Musharakah (participatory mode) which is, frankly speaking, is not much practical for general use because of exposure to risk attached to it.
 
 
 
 
  Usage of Credit card has two elements: a) Payment Device b) Credit Line. As per Shariah, you can use it as a payment device through which you pay any amount you owe to any person while you shop or go for eating on Credit card. The second use of credit card is a "Personal clean Credit Line" which means availing an interest-based facility from a bank. When you draw cash from bank on your Credit card or you do not pay your dues within the grace period allowed for payment (usually 45 days), the bank starts charging interest on the outstanding amount. This use of Credit card is not allowed since in this case you indulge yourself in a Haram activity.

Supporting of Banking system indirectly has been a matter of debate among Ulema. In fact, when you put your money with a Conventional bank, or you give it a single rupee you are supporting the banking system. No matter whether you open a current account or you pay your tuition fee, you in fact increase banking deposit which is absolutely indirect help of the bank. Ulema are of the view that since the entire economic and financial system is unfortunately interest-based, therefore, if a person keeps himself away from direct involvement in interest generating process the hope is that he will not be considered a sinner in eyes of Allah in-Shaa-Allaah-Ta'aala.
 
 
  Credit purchases on Credit cards are allowed if their payments are done within grace period. Minimum payments are not allowed in Shariah, the payment of dues would be full with no any outstanding that attracts financial charges (interest). Yes, the additional amount you pay on your dues as financial Charges fall under preview of Riba.
 
 
 
 
 
  Account receivable are Zakatable assets unless proved to be bad debts. Account payable are loan that is excluded from Zakatable assets while deducting Zakat.
 
 
  In fact this issue has been a point of difference amongst Ulema. Some of them are of the view that Zakat is a worship of personal nature that is why government can not interfere in this by deducting from accounts directly.

However, other opine that if Zakat is deducted by government directly then this deduction would be considered fulfillment of the obligation of Zakat.

However, I advise you to sign a declaration of no-deduction (I am missing the correct name of the declaration you may ask any banker) in which you may say that you want to Zakat yourself being a follower of a particular Fiqh. I am of this view because utilization of Zakat by government is very much doubtful. It would be better to be 100% sure in these important worships rather than getting doubtful in fulfillment of the obligation.
 
 
  The Hadith you referred to is absolutely right and is there in Timidhi. In his commentary on Hadith, Imam Tirmidhi has clearly mentioned that there are two different views about new addition to wealth. First view, which is supported by Imam Malik, Imam Shafaee, Imam Ahmad, Imam Ishaque and many other Fuqahaa, is that every addition in wealth should be given a year to be imposed Zakat. So if a person has some Zakat-able wealth (Maal) and he received some more during the year he should only pay Zakat on the wealth which has completed a year. The addition during the year will be considered Zakat-able if it completes a year-turnover.

The second view, which is opined by Imam Sufyan Thauri and Ahl-e-Koofa (Imam Abu Hanifah and other Fuqahaa of Koofa), is that if a person has Nisab of Zakat (Zakat-able amount of wealth) at the start of year then addition to this or subtraction from it would be negligible in terms of time, and he should include all available wealth in Nisab (Zakat-able wealth). No matter whether he got the addition during the year, before the end of year or after start of year.

The second opinion is adopted by Ahnaaf (Followers of Imam Abu Hanifah) and thus I have mentioned this opinion in TV program.

This opinion has a very strong logic. See if a person starts calculating period of one year for every addition, he will face lot of difficulties in managing things and he may not be able to decide a cut-off date for Zakat. This was reason behind this Fatwa.
 
 
  Zakat is not applicable on things of personal use except jewelery. So Zakat is not applicable on your these things of personal use.
 
 
  No, Zakat is not deducted from Non-Muslims.
 
 
  If he is under heavy burden of loans which exceeds his assets then you can give him Zakat other wise not.
 
 
 
 
  As a matter of principle you should go for Hajj with your husband or Mehram (brother, nephew etc. etc.). In absence of these relatives or impossibility of accompanying them with you due to financial or other problem, Hajj is not Farz on you and you are not required to go for Hajj.

However, in case you are going for Farz Hajj, Ulema allow to go with a group of trustworthy women. So you can go along the relatives you mentioned in your question. But I think as per the laws you should declare in Hajj Application Form with whom you are going for Hajj. I do not know how can you deal with this issue.
 
 
 
 
 
  Employment in Conventional banks is not allowed in Islam. Two things must be observed in performing duties and employment as per Islamic guidelines:

1. The job should be Halal in nature.
2. The person employed should perform his duties in acceptable manner which include honesty, attention and doing better for job.

So, if a person performs a non-Halal job his employment is Haram, no matter whether he performs his job with honesty and attention. Therefore, job in a pub or casino is Haram whether you do your duties with honesty or not. Employment in Conventional banks is Haram so if you perform your duties with honesty it does not make your job Halal.
 
 
  A Muslim can go to a non-Muslim country for any halal (permissible) purpose. Going to non-Muslim countries for purposes other than preaching is Jaaiz (permissible). The view of some people you quoted is incorrect.
 
 
  You are not a real Buyer or Seller. You are just a "Commission agent" who performs marketing between Buyer and Seller. So the way of performing Agency operation you asked for is permissible and Halal provided if both know you are an agent.
 
 
  Maintaining the infrastructure as per the standards is also required by Shariah. Licenses are given with certain condition fulfilling of which is mandatory. People who do not follow these conditions are, in fact, doing sinful activities. Investment in a business depends on its status in Islam. If the detail you have written is right then you are not allowed to invest in such business which runs on dishonesty. Underweight policy is HARAM. Allah (SWT) has declared this activity as very bad thing in Sura Al-Tatweef (Parah 30).
 
 
  Yes, this is true for Conventional banking industry as their business is lending and borrowing money, the spread between this lending and borrowing is their "Earning". This earning is considered Haram in Islam.
 
 
  The answer to this question may require much time to be understood thoroughly. I will try my best to make my point clear to you. You will agree that we are not living in an ideal environment for Islamization of whole system. Our whole life style is in contradiction with the instructions of Islam. Now, two possibilities are there:

1. One is to wait for an ideal environment to be there so that any change can easily be adopted and the system smoothly converted to be Islamic one during a period of time; 2. The second option is to start stepping forward to have changes towards betterment and development.

First option looks very nice and no doubt things should be like this. You may agree with a famous proverb “Easier said than done”, if things are so easy and changes take place so smoothly then we should call this world a “paradise”. Systems do not change according to wishes and Utopian thoughts. Instead, systems do take lot of time to change. History of every civilization is sufficient evidence for that. In early days of Islam changes have happened in the same manner, see at the prohibition of liquor, prohibition of interest, prohibition of talking during prayers and many other examples that lay down in front of us are the basis for changing systems.

I would like to quote a Hadith in which it has been narrated that a person came to Holy prophet (SAWS) and said: “ I have some bad habits: laying, theft and drinking, I can leave only one, advise me which should I leave?”. The answer given by Holy profit (SAWS) gives us a theoretical base to make changes happen in constant and productive manners. He (SAWS) said: “just don't lie!”. The person went and tried to drink and steal but he then thought if I were asked by the Prophet what had I done, what would be my reply? Then this person did not commit any of these vices.

See! do you think Holy prophet (SAWS) allowed this person to drink or steal? No! The gist behind preventing him for not doing only one thing and not telling him any thing about other bad thing was to make him change with given capabilities. He (SAWS) did not ask him to leave all bad habits at once or to prepare for hell.

Now, keeping in mind this Hadith and other uncountable similar Ahadith, Ulema and scholars have very clearly defined that if an institute stops from doing further impermissible activities then it may start halal and permissible activities from the amount.

Establishing a bank is not an easy task, the recent requirement is around Rs. 6 Billion as paid up capital. So huge investments may can not come from small investors.

If you thoroughly analyze the businesses that are Halal like textile, leather and pharmaceutical industry, you will find many deviations from Islamic instructions in these businesses, this simply indicates that 100% crystal clean investment is not possible in these times. Possibly you are working in an organization which has interest-based financing facilities, all of these are solid evidences to prove whatever I have written above.

I hope you have got the answer to your question.
 
 
  Being a general member of society you are not required to do something additionally for prayer arrangements (obviously I am taking about religious obligation and not voluntarism as you can do voluntarily whatever you want). But if the break-for-prayer is introduced by the government as it is in Saudi Arabia then it would be a better way to facilitate people for performing their prayers. Nevertheless, prayers are Farz and everyone should arrange something for that. Being owner of the shop you should have some arrangements for prayer (like praying area etc. etc.) and you should encourage your employees to perform prayers in very sophisticated manners, because your responsibility is to tell others and encourage them not to enforce them for that.
 
 
  Not at all, you can not enforce your employee for that since you do not possess Authority. The Aayat you referred explains the duties of Muslim rulers as it is obvious from words "If they (Believers) are given authority on land. . .". Your ownership does not equals to the authority mentioned in Qura'an.
 
 
  Conventional securities companies do not observe Islamic instructions in business conduct. They deal in shares of every company no matter whether they are Halal or Haram. Some other ways are also in their practice that are not permissible in Shariah like funding/financing from Conventional banks for buyers or sellers and short selling etc. Therefore, there is no doubt about the fact that income of these funds has Haram elements and for that reason working in these companies does nor appear a desirable and permissible act.

But my advice to you is to keep searching for a job in your area of expertise i.e. investment management companies, there are many asset / investment management companies that follow Islamic guidance in their operations, and exercise your best abilities to find out such a job, before you find a job in a Halal company you may keep with present company seeking Maghfirat from Allah on this sinful act.
 
 
 
 
 
  View of Ulema about Day-trading is its non-permissibility. Because in Day trading a buyer buys a scrip at say 10:30 am @ Rs.95 and sells it at 11:15 am @ Rs.96. The reason behind its non-permissibility is that the buyer sells a commodity before he takes its delivery that is done on Day 3 after Day of trading. Well knowingly selling before taking possession is not allowed in Shariah.
 
 
  Yes, BankIslami pus its efforts to do only Shariah compliant business. I am here to see daily operations of the Bank to make it Shariah compliant.
 
 
  A On what price they could be purchased (above or under their face value) ? Would they constitute a transaction of money for money as major part of company assets is in kind of money?
B Would the Dividend from these shares be Halal?
C Would the Capital gains by sale of these shares be Halal?

A. BankIslami's share could be purchased and sold at any price since the company has financial assets along with its fixed assets.
B. Yes the Dividend is Halal
C. Capital gain is also Halal because the share itself is Halal.
 
 
  Buying and selling of shares is permissible if they meet following conditions:

A. They are not shares of a company which does not do a Halal business, like Conventional banks, Insurance companies, Entertainment companies or Alcoholic business performing companies.
B. The additional income of the company (shown as "other income" in Balance Sheet) should not be from Bank deposit and Investment in interest-bearing securities like Bonds, PIBs, DSS, TFCs and other instruments. If any income of this nature is there it should be less than 5% of total income and should be given to charity as function of purification.
C. The company should not have heavy interest-bearing borrowings (technically called "High leveraging"), in case of interest-bearing borrowings the ratio of this borrowing to total asset should be less than 45%. If a company meets these criteria trading in its share is permissible and Halal.
 
 
  There are various conditions to be fulfilled for a stock to be declared Halal:

1. If the stock is not of a company that does Haram business;
2. The leveraging ratio of the company is not above over 40%
3. The interest income should not exceed 5%
4. The unwanted income should be purified from profit

Some other conditions are also there that should be followed in investment policy.
 
 
 
 
 
 
  The profit/return/income you receive on your deposits with National Savings is Riba (Sood) i.e Interest which is Haram and not allowed for any use accept giving it to needy people or charitable organizations. Its use for rent is also not allowed because this falls under personal use of interest which as I have said is not allowed.
 
 
  Profit from Defence Saving is interest based and is therefore Haram. Any Haram income should be got rid of. Therefore Ulema have opined that Haram income should be given to needy Muslims without having "Niyat-e-Sawab". Because "Sawab" is given by Allah on spending good wealth and not the Haram one.
 
 
  The amount given as Prize to bond holders is not Halal. The reason for its non-permissibility is that the amount given to bond holder is interest given on loan. In fact under public borrowing arrangements whatever government takes from public it usually gives interest in two ways: a) Interest with fixed percentage for every bond holder. This is the case in National Savings Schemes. b) The second way to give interest is to give a huge amount to some bond holder not to all of them. This is the case in prize bonds therefore Ulema have declared the prize given to bond holder as "Riba".
 
 
  Though National Savings is an institution which aims at public servicing but this does not make all its actions true and acceptable to Islam. The ends do not justify means. NS schemes and other public borrowing techniques are unfortunately based on interest payment on deposits.

Islamic banks pay something (profit/return) on the deposits which looks apparently similar but are quite different in fact. The depositors have a profit-and-loss sharing relationship with the bank while there is no concept of profit and loss sharing in public borrowing as such. Therefore, investment in National Savings is as good as depositing money with any conventional interest bearing banks and thus is Haram.
 
 
 
  It depends upon the way they are running the fund and the Shariah Advisory council.
 
 
 
 
  Yes, it is permissible.
 
 
 
 
  Islamic banking rules and laws are based on rulings given by AAOIFI (Accounting and Auditing Organization of Islamic Financial Institution). AAOIFI is a shadow institution of Islamic Fiqh Academy in the sense that it adopts rulings and Fatwas issued by IFA (Islamic Fiqh Academy), Jeddah. The IFA consists of the prominent Ulema of 56 Islamic countries from all Fiqhs (Hanafi, Shafai'e, Maalikee and Hanbalee). They sit together and study almost all modern-day issues and issue a Fatwa that sometimes has touch of more than one Fiqh.
 
 
 
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