He was asked about certain bank transactions (known as murabahah).
Machine translationRead the Arabic original
The Shaykh : In this pleasant evening, if Allah wills, we will hear about some of the transactions that take place in the Islamic bank, according to what Abu 'Abdullah told me. I suggest that if there are, for example, many transactions—five, six, ten, or more, it does not matter—we select from these transactions those about which you may have heard questions or doubts regarding them, so that we can begin investigating them. If time permits for others, we will move on to them. What do you think?
The questioner : If Allah wills. I suggest, even if briefly, that it be clear so that the listener benefits from it.
The Shaykh : In any case, this is my suggestion, and you have your own opinion.
The questioner : Of course, initially, the bank's work is to attract deposits and then dispose of them by investing them. That is, the bank attracts deposits from customers in the form of accounts, like any other bank, attracting deposits, and of course, it invests these funds. We want to come to the first area of investment. It invests these funds in three directions. The first direction is murabahah financing, which is permitted in the Shari'ah. The second direction is diminishing partnership. The third direction is mudarabah, according to its concept in Islam, with the same concept.
The Shaykh : Yes.
The questioner : Of course, the focus in the bank's operations is on murabahah financing, and the focus on murabahah financing is significant. The second operations are much lighter, and mudarabah is the lightest of them. This is so that we can be clear.
The Shaykh : Yes.
The questioner : Murabahah financing is the order to purchase, where the bank or the customer who wants to borrow for the same purpose... let us give a practical example to make it clearer.
The Shaykh : Yes.
The questioner : For example, a person wants to buy twenty tons of steel. He comes to the bank and says, "I want to buy twenty tons of steel from such-and-such a shop based on this offer invoice. Their price is, for example, ten thousand dinars." The bank purchases this quantity of steel and delivers it on the back of the truck to the one who ordered the purchase. Of course, this is in exchange for a guarantee of bills of exchange at a price or cost higher than twenty thousand dinars. Of course, a specific profit percentage is added, agreed upon from the beginning, to be paid in monthly installments according to the agreed period. The period controls the profit price, meaning the profit percentage. That is, if it is one year, it will be seven percent; if it is two years, it becomes thirteen percent, and so on in a sequence. Of course, the installments are paid as the amount plus its profit. This is murabahah financing, which is permitted in the Shari'ah...?
The Shaykh : Now, you say, as was of course told to you, that it is permitted by the Shari'ah. Where is the text of the Shari'ah that permits this transaction, which they call today murabahah? Did they give you the evidence for that?
The questioner : Of course, he has the book Al-Umm by al-Shafi'i, which mentions a hadith... I heard that some of them weaken it, and it does not have a strong chain of narration.
The Shaykh : But the picture you presented now, does Imam al-Shafi'i say in it?
The questioner : I am telling you this practical aspect that happens with me.
The Shaykh : No, the practical aspect is one thing, and the jurisprudential aspect is another. The practical aspect is what I described regarding what the bank does with its customers. Now, the research is not here. The research is that you are naming this transaction, following of course the senior and junior employees there, as murabahah, or that the Shari'ah permitted it, at least. Now, let us stand at this picture and look at the Shari'ah that we believe in, and what came in it:[Al-Baqarah 2:275] Riba is known to everyone as "taking an increase in exchange for a loan." This is riba, such that if a person takes one hundred dinars from a bank or from a person on the basis that he will repay the one hundred after a certain period as one hundred and five, these five become riba, is that not so?
The questioner: Yes.
The Shaykh : This is a matter on which there is consensus. Now, after we focus this agreed-upon fact in our minds, we move on to something that many people may not be aware of. This thing is what is called by some jurists "legal stratagems" (hilaal shar'iyyah). Do you have an idea about this name, legal stratagems? Do you have an idea about them?
The questioner : No, by Allah, I do not.
The Shaykh : You do not have an idea. Legal stratagems refer to circumventing the ruling of the Shari'ah so that we exit from it to another ruling. The matter is forbidden in the Shari'ah, but by circumventing the form, the ruling shifts from prohibition to permissibility. To clarify this issue, we bring two examples. One of them is known, in my opinion, to most Muslims, whom we assume have some general culture of the Islamic Shari'ah. As for the second example, it is specific to those who have special knowledge of the Prophetic Sunnah.
The questioner : If Allah wills. I suggest, even if briefly, that it be clear so that the listener benefits from it.
The Shaykh : In any case, this is my suggestion, and you have your own opinion.
The questioner : Of course, initially, the bank's work is to attract deposits and then dispose of them by investing them. That is, the bank attracts deposits from customers in the form of accounts, like any other bank, attracting deposits, and of course, it invests these funds. We want to come to the first area of investment. It invests these funds in three directions. The first direction is murabahah financing, which is permitted in the Shari'ah. The second direction is diminishing partnership. The third direction is mudarabah, according to its concept in Islam, with the same concept.
The Shaykh : Yes.
The questioner : Of course, the focus in the bank's operations is on murabahah financing, and the focus on murabahah financing is significant. The second operations are much lighter, and mudarabah is the lightest of them. This is so that we can be clear.
The Shaykh : Yes.
The questioner : Murabahah financing is the order to purchase, where the bank or the customer who wants to borrow for the same purpose... let us give a practical example to make it clearer.
The Shaykh : Yes.
The questioner : For example, a person wants to buy twenty tons of steel. He comes to the bank and says, "I want to buy twenty tons of steel from such-and-such a shop based on this offer invoice. Their price is, for example, ten thousand dinars." The bank purchases this quantity of steel and delivers it on the back of the truck to the one who ordered the purchase. Of course, this is in exchange for a guarantee of bills of exchange at a price or cost higher than twenty thousand dinars. Of course, a specific profit percentage is added, agreed upon from the beginning, to be paid in monthly installments according to the agreed period. The period controls the profit price, meaning the profit percentage. That is, if it is one year, it will be seven percent; if it is two years, it becomes thirteen percent, and so on in a sequence. Of course, the installments are paid as the amount plus its profit. This is murabahah financing, which is permitted in the Shari'ah...?
The Shaykh : Now, you say, as was of course told to you, that it is permitted by the Shari'ah. Where is the text of the Shari'ah that permits this transaction, which they call today murabahah? Did they give you the evidence for that?
The questioner : Of course, he has the book Al-Umm by al-Shafi'i, which mentions a hadith... I heard that some of them weaken it, and it does not have a strong chain of narration.
The Shaykh : But the picture you presented now, does Imam al-Shafi'i say in it?
The questioner : I am telling you this practical aspect that happens with me.
The Shaykh : No, the practical aspect is one thing, and the jurisprudential aspect is another. The practical aspect is what I described regarding what the bank does with its customers. Now, the research is not here. The research is that you are naming this transaction, following of course the senior and junior employees there, as murabahah, or that the Shari'ah permitted it, at least. Now, let us stand at this picture and look at the Shari'ah that we believe in, and what came in it:
But Allah has permitted trade and has forbidden interest
أحل الله البيع وحرم الرباThe questioner: Yes.
The Shaykh : This is a matter on which there is consensus. Now, after we focus this agreed-upon fact in our minds, we move on to something that many people may not be aware of. This thing is what is called by some jurists "legal stratagems" (hilaal shar'iyyah). Do you have an idea about this name, legal stratagems? Do you have an idea about them?
The questioner : No, by Allah, I do not.
The Shaykh : You do not have an idea. Legal stratagems refer to circumventing the ruling of the Shari'ah so that we exit from it to another ruling. The matter is forbidden in the Shari'ah, but by circumventing the form, the ruling shifts from prohibition to permissibility. To clarify this issue, we bring two examples. One of them is known, in my opinion, to most Muslims, whom we assume have some general culture of the Islamic Shari'ah. As for the second example, it is specific to those who have special knowledge of the Prophetic Sunnah.
Source
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