عربي
Home


Resolutions of Iftaa' Board


Resolutions of Iftaa' Board

Resolution No.(49) "Ruling on Financing the "Diminishing Partnership" Offered by the Central Bank to its Employees"

Date Added : 16-12-2015

Resolution No.(49): "Ruling on Financing the "Diminishing Partnership" Offered by the Central Bank to its Employees"
Date: 24/4/1422 AH, corresponding to 15/7/2001.

What is the ruling of Islamic Sharia on the diminishing partnership system offered by the Central Bank to its employees?

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.

Over several sessions, the Board has reviewed the above issue and arrived at the following view:

Employees of Islamic banks and others can obtain dwellings by one of the following formulae:

First: Murabaha in favor of the purchaser where the employee covers the costs of the construction team; whereas, the bank covers the cost of materials which can be bought through the Murabaha transaction so that they become possessed and guaranteed by the bank. This formula can be employed for purchasing a flat or a building in line with the rules of Murabaha.

Second: Istisna` (making on customer`s order). Here, the bank provides the needed financing in line with the conditions of this form of transaction whereby a flat or a building could be built.

However, the formula, in the above question, presented to the Iftaa` Board: "The Diminishing Partnership" and the attached contract differ from a similar contract that had been approved by the Board where the law had defined it as: (The bank participates as a financing partner- partially or completely-in a project of an expected income on basis of agreeing with the other partner that the bank receives a percentage from the net of the actual income while maintaining the right to keep the remaining part of the profit or some of it, to be agreed upon, to cover the original amount of financing it had provided.) 

In other words, the income of the project, which is based on the aforementioned contract, is the one expected upon the conclusion of the contract itself and the determiner of the expected income is the market, after the completion of the project.

First: it isn`t permissible to estimate that revenue in relation to the financing amount provided by the bank, which settles it on basis of the diminished interest, as is the case of the contract presented to the Board. From the perspective of Sharia, that interest is unlawful although it is low.

In order for this formula to become valid, it isn`t correct to calculate the expected revenue in the manner mentioned above; rather, it should be left to the market.

Since the employees desire to have dwellings for residence and since these won`t be offered for leasing, then the Sharia alternative is that a committee of trustworthy and honorable experts estimate the rent of similar premises after the project is finished based on  actual estimation of the prices of similar houses and flats. In conclusion, it is imperative that the contract is rewritten on the basis that draws a distinction between the acceptable and the unacceptable form in Sharia, this is of course if the employee and the bank wish to resort to the above formula "The diminishing partnership", or they can simply resort to other formulae mentioned above. And Allah Knows Best.

 

Chairman of the Iftaa` Board, The Supreme Judge, Sheikh Izuldeen At-Tamimi

Dr. Abdulsalam Al-Abbadi

  Dr. Yousef Ghyzan

Dr. Wasif Al-Bakri

Sheikh Saeid Hijjawi

Dr. Abdulaziz Al-Khayat

Sheikh Na`eim Mujahid

  Dr. Mahmoud Abu Yahia

Sheikh Mahmoud Shewayat

 

Decision Number [ Previous | Next ]


Summarized Fatawaa

What should a person, who delayed making up missed fasts of last Ramadan due to the continuance of the same excuse, do?

It is permissible for one, whose excuse for not making up missed fasts of last Ramadhaan has continued, to delay fasting until the excuse ceases to exist, and he is considered neither sinful, nor obligated to pay a ransom. And Allah Knows Best.

Is it permissible for my brother, whom I had suckled, to conclude a marriage contract between his daughter and my son?

Such marriage is impermissible since one`s nephew in this situation is considered an uncle to one`s daughter; consequently, he is the brother of her father by suckling. In such cases, the people in question should go to court to prove the suckling.

I work in an accounting and auditing office, and among the clients of the office are restaurants, hotels, and supermarkets that sell alcohol. Our work is limited to collecting invoices, whether purchases, sales, or expenses, and recording them in daily books. We also review income and sales taxes on behalf of these clients.

You are more knowledgeable about the nature of your work. If you see it as assisting in wrongdoing, then it is forbidden, as Allah The Exalted Says (What means): "And cooperate in righteousness and piety, but do not cooperate in sin and aggression" [Al-Ma’idah/2]. However, if your work is merely documenting the reality, then I hope there is no sin upon you. The the pious predecessors (Salaf) used to take the tithe from the traders of the People of the Book, even if it included alcohol, after knowing the value of their goods. And Allah The Almighty Knows Best.

Should one fulfill his vow of donating an animal to the poor and needy with one sheep although he had repeated the vow several times?

Each vow has to be fulfilled, and repeating the words of the same vow for confirmation renders its fulfillment obligatory as one vow. As for multiple vows, they have to be fulfilled as well.

See More