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Resolutions of Iftaa' Board


Resolutions of Iftaa' Board

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

In life insurance with the Potash Company, enrollment is mandatory, and employees have the right to receive a cash amount from the insurance for surgeries and illnesses while employed by the company. Is the amount given by the insurance in this case permissible (Halal) or prohibited (Haram)?
 

Since the insurance is compulsory, then what the insurance company pays in return for medical treatment is similar to donation, and I pray to Allah The Almighty that this is lawful even if this service is deducted from your salary in return of it, so in this manner you take back some of the amount you paid in form of above treatment. And Allah Knows Best.

Is it permissible for a father to divide his property amongst his children except one under the pretext that he has paid for the latter`s tuition? This is knowing that his other children were given the opportunity to pursue their education but didn`t because they were educationally poor. Moreover, is he allowed to give his other children who have helped him with growing his business?

All perfect praise be to Allah the Lord of the Worlds. May Allah`s peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
The father should be just between his children as regards gifts, in case they had similar circumstances. However, if any had a special merit, then it is permissible for the father to take that into account to be just. For example, giving his children who have helped in making his fortune and received no reward for that or giving the little ones because they haven`t taken as much as the older ones or giving the sick child who is unable to make a living. The most important thing is achieving justice. Moreover, the father is not interdicted by any of his children, and he is free to do whatever he wants with his money and Allah will call him to account as regards observing justice between his children. And Allah The Almighty Knows Best.

I`m a pious Muslim woman, but my husband isn`t, what should I do?

You should exercise patience, make supplication that Allah guides him to the straight path, and keep advising him kindly.

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It is not permissible to sell gold or silver on an installment basis or with a deferred payment; rather, immediate exchange is required. The Messenger of Allah (PBUH) 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 gives more or asks for more has engaged in usury; the giver and receiver are the same in this regard." (Muslim). Additionally, the weight of the gold must be equal when exchanging new for used; otherwise, it involves usury. The solution is to buy the used gold with cash, then sell the new gold for cash as well. However, payment must be made at the time of the transaction in both cases. Alternatively, one could take the used gold with the intention of refining it, reshape it into a new form, or repair it, then take a fee for the workmanship or repair. And Allah Knows Best

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