The Role of Artificial Intelligence in Advancing Islamic Banking Operations

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Summarized Fatawaa

What is the ruling of Sharia on tubal ligation?

All perfect praise be to Allah, the Lord of the Worlds; may His blessings and peace be upon our Prophet Mohammad and upon all his family and companions.

Undergoing tubal ligation* to protect the mother`s health is permissible provided that this procedure is performed based on professional opinion of trustworthy medical doctors. And Allah The Almighty Knows Best.

*Tubal ligation is a surgical procedure for female sterilization in which the fallopian tubes are permanently blocked, clipped or removed. This prevents the fertilization of eggs by sperm and thus the implantation of a fertilized egg. Tubal ligation is considered a permanent method of sterilization and birth control.

Is it permissible to go to the bathroom wearing a necklace that has the word "Allah" inscribed on it?

All Perfect Praie be to Allah, The Lord of The Worlds, and may His Peace and Blessings be upon our Prophet Muhammad and upon all of his family and companions.

Anything that contains words pertaining to Allah, The Almighty, is desired to be left outside when going to the bathroom, or to be hidden for fear of losing it. And Allah Knows Best.

Is Zakah (obligatory charity) due on owned land?

Zakah is due on the land used as an article of merchandise and was originally bought for that end. Zakah is due on it at the end of every lunar year. Its value is estimated, and (2.5%) of the total value of all such lands owned by the questioner is given as Zakah. However, no Zakah is due on the land used for building a house, or an agricultural purpose.

Is Zakah (obligatory charity) due on the Zakah money received by a poor person, and reached a Nissab (minimum amount liable for Zakah), and a whole lunar year had lapsed over having it in his possession?

Yes, the poor who possessed a Nissab for a whole lunar year is obliged to pay the Zakah due on that money even if it was given to him as a Zakah money in the first place. And Allah Knows Best.

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The Role of Artificial Intelligence in Advancing Islamic Banking Operations

Author : Dr. Safwan Odaybat

Date Added : 03-01-2024

The Role of Artificial Intelligence in Advancing Islamic Banking Operations

All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

One of the emerging topics for which seminars and conferences are held, and attracts researchers to study and explore its potential developments across various fields and disciplines is the subject of Artificial Intelligence. This topic elicits concerns about its potentially destructive impacts on one hand, while on the other hand, it raises hopes and expectations for significant positive effects on improving the quality of life and serving humanity.

Before delving into explaining the impact of Artificial Intelligence on Islamic banking, it is essential to clarify the meaning of Artificial Intelligence and Islamic banking:

Artificial Intelligence can be defined as a set of technologies and software aimed at enabling computer systems to perform tasks that are typically considered important for human intelligence and facilitate operations associated with specific tasks.

Artificial Intelligence relies on data and algorithms to achieve specific objectives. Its applications encompass a diverse range of fields such as machine learning, natural language processing, robotics manufacturing, medical diagnosis, risk management, and more.

Islamic banking can be defined as a financial system based on the principles of Islamic law (Sharia). This system requires abstaining from practices such as usury (interest), uncertainty or speculation (Gharar), and injustice. It encourages financing and investment in ways that are in tune with Islamic values and principles.

The role of artificial intelligence in advancing the operations and services of Islamic banking is highlighted through the following:

1-Enhancing Efficiency and Risk Management:

Artificial intelligence can contribute to the development of Islamic banking by improving its operational efficiency through enhancing analysis processes and risk management. One possible means to achieve this is by utilizing machine learning to enhance credit assessment, identifying potential loans with greater accuracy and efficiency. Additionally, artificial intelligence will contribute to boosting employee efficiency by selecting suitable development, training, and educational methods tailored to their needs.

2-Development of Innovative Financial Products:

Artificial intelligence enables Islamic banking to develop innovative financial products that align with the principles of Islamic Sharia. For example, smart investment solutions can be developed based on financial analytics and Sharia-compliant guidelines.

3-Enhancement of Customer Experience:

Artificial intelligence can improve customer experiences in Islamic banking by providing personalized financial services tailored to the specific needs of customers. It can offer accurate investment guidance that aligns with customers' goals without conflicting with Islamic values.

4-Combatting Money Laundering and Terrorism Financing:

Artificial intelligence can contribute to enhancing financial integrity through intelligent operations that develop and improve the quality of monitoring financial transactions. Consequently, it can uncover all illicit and internationally prohibited activities, including money laundering and terrorism financing.

5-Facilitating Compliance with Islamic Sharia:

Artificial intelligence contributes to the development of Islamic banking by achieving better compliance with the rules of Sharia. This can be accomplished by providing guidance to financial professionals or by enhancing financial audit and monitoring processes.

In conclusion, the topic of the impact of artificial intelligence on Islamic banking in general requires precise scientific studies and research to highlight both the positive aspects and potential challenges. While artificial intelligence may contribute to enhancing the efficiency of financial services and their compliance with Sharia, ethical considerations and Islamic values must be taken into account in the application of this modern technological advancement.

Article References:

1-Book: "Artificial Intelligence and Its Impact on the Economy and Islamic Banking" by Dr. Rafiq Ali Suleiman.

2-Book: "Islamic Banking and Artificial Intelligence Technology: Challenges and Opportunities" by Dr. Mohammed Al Nuaimi.

3-Research Paper: "Artificial Intelligence Technology and Its Impact on Islamic Financial Services" by Researcher Ahmed Abdullah Al Salman.

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Summarized Fatawaa

Is Lease-to-own through Islamic Bank Permissible?

Lease-to-own is a controversial issue among contemporary Muslim scholars; we (Iftaa Dept.) advise you and in order to be on the safe side to conclude this sale transaction through Murabaha contract. And Allah Knows Best.

What is the Islamic ruling on parents asking son to divorce his wife?

Praise be to Allah the Lord of the Worlds.

If their asking him to do so is justified in Sharia, then there is no blame on him to obey them. And Allah The Almighty Knows Best.

Someone asked me to pay off his debt on his behalf as a loan, without any compensation. When I went to the creditor, he told me that if I paid the full amount at once, rather than in installments, he would give me a certain discount. Is this permissible? And if he applies the discount, to whom does the deducted amount belong?

If part of the debt is paid and the creditor forgives the remaining amount, the waiver is valid, and the remaining debt is no longer the responsibility of the original debtor. The person who paid the debt on behalf of another has no right to claim any portion of the original debt. And Allah Knows Best.

What should a praying person who doubts having offered one, or two prostrations in the third Rakah (unit of prayer) do?

Whoever has doubts about their prayer should consider what is less i.e. the above person should offer another Sajda (prostration) and complete his/her prayer, then offer Sujood As-Sahw (prostration of forgetfulness). And Allah Knows Best.