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Resolutions of Iftaa' Board

"resolution No.(307): "Organized Banking Tawarruq is Forbidden from the Perspective of the Higher Objectives of Sharia"

Date Added : 09-01-2022

Resolution No.(307)(15/2021): By The Board of Iftaa', Researches and Islamic Studies:

"Organized Banking Tawarruq is Forbidden from the Perspective of the Maqasid of Sharia"

Date: (25th of Jumada Al Oula, 1443 AH), corresponding to (30/12/2021 AD).

 

In the name of Allah, Most Gracious, Most Merciful

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.

On its sixteenth meeting held on the above date, the Board of Iftaa`, Research, and Islamic Studies reviewed the issue of organized banking Tawarruq* or what is sometimes called "Personal Finance" offered by some Islamic banks.

After careful consideration, the Board decided the following:

Unlike conventional banks, Islamic banks rest on meeting the Maqasid of Sharia (The higher objectives of Sharia) as well as observing its rulings. For this, their transactions, in essence, are based on supporting the real economy and applying the methods of investment, which comply with the rules of Sharia.

From the perspective of Sharia, in contracts, intentions and meanings, not words and structures, as well as outcomes shall be taken into consideration, so dealing with organized banking Tawarruq is prohibited  based on the maxim "Prohibition of what may lead to sins", which is, in this case, Riba (Usury/interest). This is in addition to emphasizing that the difference between Islamic and conventional banks isn`t a mere difference of form. Moreover, this Tawarruq will have a negative impact of the Islamic economy because there is no real growth nor rotation of the economic sectors; consequently, many Fiqh academies, Fatwa houses, and the majority of the scholars issued Fatwas prohibiting organized Tawarruq.

During its 19nth meeting/2009 AD, the International Islamic Fiqh Academy issued a resolution prohibiting the organized banking Tawarruq or what is called "The Personal Financing." The reason for this is that there is explicit, implicit, or customary collusion between the financier (Bank) and the customer whereby the latter gets instant cash for a higher amount that he/she owes to the bank, and this is usury per se. We can add that this has been confirmed by the Iftaa` Board of Jordan through Resolution No.(3/2012) which considered organized Tawarruq as a form of circumventing Riba because the real objective is obtaining instant money in return for paying extra amount to the bank.

In conclusion, we confirm this Resolution and rule that Islamic banks must abide by the Sharia-compliant investment methods that achieve the higher objectives of Sharia. And Allah The Almighty Knows Best. 

 

 

Chairperson of Iftaa` Board,

Grand Mufti of Jordan,

Dr. Abdulkareem al-Khasawneh

Dr. Mohammad al-Khalayleh

Prof. Mahmoud al-Sartawi/ Member

Dr. Majed al-Darawsheh/ Member

Sheikh Sa`eid Al-Hijjawi, Member

Judge Samer Al-Khobbaj/ Member

Prof. Adam Nooh Al-Qhodaat/Member

Prof. Amjad Rasheed/Member

Dr. Jamil Khatatbeh/Member

Dr. Ahmad al-Hasanat/ Member

Dr. Mohammad Younis Al-Zou`bi/ Member

 

 

* Tawarruq means a sale contract in which the buyer obtains merchandise on credit and then sells it at a loss to the original seller for cash. And Allah Knows Best

 

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Summarized Fatawaa

What is the ruling on selling sacrificial animals (udhiyah) described with specific attributes and authorizing an agent to slaughter them?

Praise be to Allah, and peace and blessings be upon our Master, the Messenger of Allah.
 
Selling sacrificial animals (udhiyah) that are described with specific attributes is permissible. This falls under the category of a salam sale (forward sale) if conducted using the terminology of salam, and under the category of a regular sale if not using the terminology of salam.
 
As for authorizing the seller to slaughter the sacrificial animal, the basic principle is that it is permissible, because the agent (wakil) stands in the place of the principal (muwakkil) in achieving his objective. This is a contract that the principal (the buyer) is entitled to perform himself, so authorizing another (the seller) to do so on his behalf is valid.
 
However, it is a condition for authorization to slaughter that the intention (niyyah) is present either at the time of slaughter or at the time of handing over the sacrificial animal to the agent. The basic principle is that the sacrificial animal must be specifically designated, as it is an act of worship. It is not required to designate it at the time of slaughter; rather, it is valid to do so before that.
 
It is permissible for the principal either to delegate the intention to the agent or to formulate it himself when authorizing the agent to slaughter. However, the sacrificial animal must be designated, even if at the time of slaughter, by the agent.
 
It is obligatory to designate the sacrificial animals so that each person offering a sacrifice receives his own specific animal. Therefore, charitable organizations and companies must take this into consideration and establish a specific mechanism that ensures no mixing of sacrificial animals occurs, so that each person offering a sacrifice receives his own designated animal. And Allah Almighty knows best.

What is the ruling of Islamic Law on selling gold or silver in installments or for a differed price?

Praise be to Allah, and peace and blessings be upon our Master, the Messenger of Allah.
 
It is prohibited (haram) to sell gold or silver in installments or for a deferred price; rather, immediate hand-to-hand exchange (Taqabud) is mandatory, otherwise, it is considered usury (Riba). The Messenger of Allah ﷺ said: 'Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt—like for like, hand to hand. Whoever increases or asks for an increase has engaged in Riba; the receiver and the giver are the same in this regard.' (Narrated by Muslim). Furthermore, when exchanging new gold for used gold, they must be of equal weight, or it falls into Riba.
 
The permissible solution (al-makhraj) is for the merchant to purchase the used gold for cash first, and then sell the new gold for cash in a separate transaction. However, the price must be paid during the sitting of the contract (Majlis al-Aqd) for both deals. Alternatively, the jeweler may take the used gold with the intent of remodeling or repairing it, and then charge a fee for the craftsmanship or repair work. And Allah the Exalted knows best."

Can someone who begins a voluntary fast break it?

It is preferable for someone who begins an act of worship not to break it.
Allah the Exalted has said {what means}: "and let not your [good] deeds come to nought!" [Muhammad/33].
However, if a person starts a voluntary fast (nafl) and needs to break it, they are going against what is preferable, but there is no sin upon them.

If a traveler settles or a sick person recovers while fasting, is it permissible for them to break their fast?

● If a sick person starts the day fasting and then recovers during the day, they must complete their fast.
● If a traveler starts the day fasting and then settles (returns or stops traveling) during the day, they must also complete their fast.
● It is forbidden for both of them to break their fast because the concession (rukhsah) is no longer valid once its reason disappears.

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