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Resolutions of Iftaa' Board

Resolution No.(40): "Ruling of Sharia on a Draft Article Concerning the Application of Zero-Interest Contracts in Financing at The Agricultural Credit Corporation"

Date Added : 15-12-2015

 

Resolution No.(40): "Ruling of Sharia on a Draft Article Concerning the Application of Zero-Interest Contracts in Financing at The Agricultural Credit Corporation"

Date: 11/11/1417 AH, corresponding to 20/3/1997

 

We have received the following question:

What is the ruling of Islamic Sharia on the draft article concerning the application of contracts in financing at The Agricultural Credit Corporation?

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

Having undertaken comprehensive study, the Board has arrived at the following version:

Article (1): This regulation is to be called (The regulation of zero-interest financing contracts at the Agricultural Credit Corporation)

Article (2): Words and expressions mentioned in this regulation shall have the equivalent meanings given below, unless the context indicates otherwise.

A- The Corporation: Agricultural Credit Corporation.

B- (The Board):  Board of Directors of the Agricultural Credit Corporation.

C- The Director-General:  Director-General of the Agricultural Credit Corporation.

D- The Sharia supervisory committee: The Committee formed by virtue of this regulation to make sure that the Corporation complies with the rules of Sharia when applying it (regulation).

Article (3): By applying the zero-interest regulation, the Corporation aims at achieving the following:

A- Widening the scope of transaction with the agricultural sector through providing financing and investment services based on this regulation.  

B- Utilizing means of agricultural financing and investment on zero-interest basis.

C- Participating in the provision of necessary financing to meet the needs of the agricultural sector and its targeted groups.

Article (4): The Corporation shall accomplish its goals through the following contracts:

A- Mudarabah (Co-partnership): A contract by which the Corporation provides the needed cash, partially or completely, to finance a defined transaction where the party contracted with (Mudarib) functions on basis of sharing the profit if both parties agree on a certain percentage. In case of loss, the Corporation shall assume the liability; whereas, the partner (Mudarib) shall receive no compensation for his effort, unless he was negligent or committed a violation.

B- Muzaraa`h (Sharecropping): A contract of investing an agricultural land concluded between the owner of the land and the Corporation that shall invest it, if the produce is divided according to an agreed upon percentage. 

C- Musaqah (Share-tenancy): A contract of investing trees concluded between a company `s owner and the Corporation whereby the latter takes care of the trees provided that the produce is divided according to an agreed upon percentage.

D- Almogharasah (farm leasing): A contract between the land lord and the Corporation whereby the latter plants the land and takes care of the planted trees and provides whatever is needed for that end during a certain period, provided that the Corporation utilizes it in accordance with the agreed upon conditions.

E-Murabaha: It means selling an object while informing the purchaser of its original price and the profit he (seller) is getting in this deal. The conditions of the validity of this transaction are the same as the other transactions, i.e. the sold item itself should be lawful, pure, useful, in the possession of seller, and the seller should be able to hand it over to the purchaser. 

F- Istisnaa` (Making at the customer`s order): A contract concluded between the Corporation and the manufacturer whereby the latter shall manufacture a specified type and quantity of a certain commodity within a specified deadline of delivery in return for a defined price to be paid by the Corporation, against the needed materials and work, or the work in case the Corporation provided the needed materials.

G- Salam (Buying in advance): Amongst the conditions for the validity of Salam transaction:

1- The sold property should be describable in terms of features, quantity and available upon delivery time.

2- The contract should include the kind of the sold item, description, quantity and date of delivery.

3- If the contract doesn`t include the date of delivery, the seller is bound to deliver the item at the contracting council.

H-Any other contracts approved by the Board.

Article (5): These contracts fall under the umbrella of the stipulations of the Civil Law.

Article (6): The Corporation shall accept the investors` funds for investing them in its sphere of activities in line with the rules of Islamic Sharia.

Article (7): The Corporation may manage the manageable properties and assets on basis of sharing the profits in line with the rules of the Mudarabah (co-partnership) contract.

Article (8): The Board of Directors shall appoint a Sharia supervisory committee of no less than three specialized scholars. In addition, none may neutralize that committee, dismiss or change any of its members, save by a resolution from the Board, and a direct recommendation from the Director-General.

Article (9): The Board of Directors shall abide by the opinion of the Committee in the following:

A- The instructions issued by the Board regarding the forms and agreements necessary for executing the above contracts.

B- Reviewing the reasons for holding the Corporation responsible for any loss in investment and financing in order to check the Sharia evidence, which backs the resolution of the Board.

Article (10): The Corporation shall draw up its general policy pertaining to zero-interest financing and investment while maintaining a sufficient flow of cash in line with the sound banking customs and practices.

Article (11): The Corporation`s law, regulations and their amendments shall be enforced in cases not addressed in this regulation and after the consent of the Sharia supervisory committee.

Article (12): The Board shall issue the applied instructions necessary for executing this regulation. And Allah Knows Best.

 

Chairman of the Iftaa Board, The Supreme Judge, Izuldeen At-Tamimi
Sheikh Sa`eid Hijjawi
Sheikh Ibrahim Khashan
Dr. Abdulsalam Al-Abbadi
Dr. Fat-hi Al-Duraini
Dr. Mahmoud Al-Bakheet
Dr. Mahmoud Al-Sartawi
Sheikh Mahmoud Shewayat 

 

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Summarized Fatawaa

Is it valid to perform Tarawih prayer at home?

It is Sunnah for a Muslim to perform Tarawih prayer in congregation at the mosque.
However, if a person sometimes prays it at home in congregation with their family for a valid reason, there is no harm in doing so.

What are the conditions governing the portion that must be distributed to the poor from a voluntary uḍḥiyyah (sacrificial offering)?

 
 
 
 
 
 

All praise is due to Allah, and may peace and blessings be upon our Master, the Messenger of Allah.
The following conditions apply to the portion distributed to the poor from the sacrificial animal:
First: It must be meat — it isn`t valid to give the poor organs or offal such as the liver.
Second: It must be given raw — cooked meat does not fulfil the requirement.
Third: It must amount to no less than half a kilogram. And Allah Almighty knows best.

If a person enters a mosque and finds the congregation in the final tashahhud, which is more virtuous — joining them or waiting for a second congregation to catch the opening takbīr (takbīrat al-iḥrām)?

All praise is due to Allah, and peace and blessings be upon our master the Messenger of Allah ﷺ.
If a worshipper finds a congregation that is about to finish its prayer, and he hopes to catch the entire prayer from the beginning with another congregation, it is more virtuous for him to pray with this first congregation and then repeat the prayer with the second one — provided he does not intend to confine himself to a single prayer. If, however, he intends to perform only one prayer, then it is more virtuous for him to wait for the second congregation rather than joining the first, so that he may attain the reward of congregational prayer for every single rakʿah.
Al-Khaṭīb al-Sharbīnī, may Allah have mercy upon him, states: "If members of a congregation enter the mosque while the imam is in the final tashahhud, al-Qāḍī Ḥusayn held that it is recommended for them to join him in prayer, and that they should not delay in order to form a second congregation. Al-Mutawallī, however, affirmed the opposite view, and al-Qāḍī's own statement elsewhere supports this latter position, which is the relied-upon view. In fact, it is more virtuous for a person who has missed part of the prayer with one congregation, and who hopes to catch another congregation with whom he can attain the entire prayer within its proper time, to delay so that he may catch it in full with them. This applies when he intends to confine himself to a single prayer; otherwise, it is more virtuous for him to pray with the first group and then repeat the prayer with the others." [Mughnī al-Muḥtāj,Vol. 3/P.186] And Allah the 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."

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