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The Problematics of Personal Finance Products in Jordan
Author : Dr. Hamzah Mash-Shoqah
Date Added : 13-05-2025

The Problematics of Personal Finance Products in Jordan


The emergence of personal finance products in Jordan:

The experience of Islamic banking in Jordan is considered one of the earliest global experiences in Islamic banking. The Jordan Islamic Bank is considered the oldest Islamic bank in the world after Dubai Islamic Bank and Faisal Islamic Bank. The Jordanian experience was founded on the Maqasid (objectives of Sharia) thought, and giants of its Sharia boards were mentored by the scholar Dr. Muhammad Fathi Al-Darini (the Little Shatibi) and the scholar Sheikh Mustafa Al-Zarqa (pioneer of the Fiqh of contemporary transactions).
The Jordanian experience in the previous period was distinguished by its innovation of diverse financial products. Among the most prominent products it pioneered are: the Murabaha to the Purchase Order product - which was conceived as a banking product by Dr. Sami Hamoud, the first general manager of the Jordan Islamic Bank - Mudaraba bonds, the gradual sale system in Ijara Muntahia Bittamleek (leasing ending with ownership), the Ju'ala product, products for financing maintenance and finishing works, and others.
The Jordanian banking experience in the previous period largely avoided personal finance products as much as possible. Exceptions could be made for cases where the bank needed these products as an alternative to interest-based products in managing the treasury department.
When one of the Islamic banks in Jordan began implementing the organized Tawarruq product in 2010 CE, we witnessed a strong reaction against this new experiment through the General Iftaa Council's ruling on organized Tawarruq in 2011 CE, and through the Organized Tawarruq and Riba-based Stratagems Conference, which was supported by the rest of the Jordanian Islamic banks in 2012.
The Jordanian General Iftaa Council's resolution No. (171) (3/2012) states: "What some Islamic banks are conducting as organized banking Tawarruq is nothing but a form of circumvention of Riba (usury). This is because the real intent of this process is to obtain money in exchange for an increase. The bank carries out a superficial purchase of goods, then sells them to the customer for a deferred amount. Subsequently, it sells them again to a third party for a lesser amount than the first, gives the immediate amount to the customer, and records the entire deferred amount as an obligation upon him."
In its reality, this is an interest-based loan, even if outwardly it appears as a form of Tawarruq. It is narrated from Imam Malik, may Allah have mercy on him, that he was asked about a man who sells goods for one hundred dinars on credit. When the payment becomes due between them, the buyer says to the seller: Sell it for me to a man for cash, as I am not familiar with selling. He said: There is no good in it, and he forbade it. [Al-Mudawwana, Vol.9/P.179] End quote.
Following that, the banks that had previously implemented organized Tawarruq began to apply personal finance products, and the issue of agency (Wakalah) was removed. This means that the common form of organized Tawarruq was based on the customer authorizing the bank to purchase and sell the commodity on their behalf. The condition of the customer authorizing the bank was removed and replaced by the customer authorizing a brokerage company affiliated with the bank itself, as a way to circumvent the predicament of organized Tawarruq.
However, if we refer back to the definition of organized Tawarruq in the resolution of the International Islamic Fiqh Academy and the resolution of the General Iftaa Council, it will become clear that organized Tawarruq includes three scenarios:
1. The customer authorizing the bank to purchase and sell the commodity. 
2. The bank authorizing a third party to sell the commodity. 
3. The existence of collusion between the seeker of Tawarruq (Mustawriq) and the bank to purchase and sell the commodity.
Resolution No. (179) of the International Islamic Fiqh Academy states:
First: Types of Tawarruq and their rulings:
(1) Tawarruq in the terminology of jurists: It is the purchase by a person (Al-Mustawriq) of a commodity for a deferred price in order to sell it for cash at a lower price, generally to someone other than the one from whom it was purchased, with the aim of obtaining cash. This type of Tawarruq is permissible according to Sharia, provided that it meets the Sharia established conditions of sale.
(2) Organized Tawarruq in contemporary terminology: It is the same image of Tawarruq where the Mustawriq purchases a commodity from local or international markets or similar for a deferred price, and the seller (the financier) undertakes the arrangement of its sale, either by himself, by authorizing another, or through collusion between the Mustawriq and the seller to do so, for a lower cash price, generally.
(3) Reverse Tawarruq: It is the same image of organized Tawarruq, except that the Mustawriq is the institution and the financier is the client.
Second: The two types of Tawarruq (organized and reverse) are not permissible. This is because they involve collusion between the financier and the seeker of Tawarruq, explicitly, implicitly, or customarily, as a stratagem to obtain present cash for a larger amount owed in the future, which is RibaزBased on that, personal finance products become a type of organized Tawarruq – which was prohibited by the resolution of the International Islamic Fiqh Academy and the resolution of the General Iftaa resolution – that is carried out through collusion, arrangement, and organization between the customer and the bank regarding the purchase and sale of the commodity.
The definition of organized Tawarruq  is  the common practice of lenders to purchase goods for those seeking Tawarruq and then resell them with authorization from the latter or through collusion, understanding, and prior agreement to do so, for the purpose of obtaining cash. It is not limited to the case of the customer authorizing the bank to sell the commodity on their behalf.
In the year 2024 CE, all Jordanian Islamic banks successively adopted personal finance products for all clients. Some of them even started applying this product to finance the debts of their defaulting clients, and this is what is called "selling debt for debt," which is a circumvention of Riba.
Therefore, this can be considered a turning point in the experience of Islamic banking in Jordan. In conclusion, the Jordanian experience is one of the earliest to have implemented Islamic banking globally, and it is one of the latest to have offered personal finance products to all clients.

The problematic nature of the expansion in the application of personal finance products:
Personal finance products are considered a dividing line in the experience of Islamic banking, and the jurisprudential debate often revolves around their legitimacy. However, this debate frequently does not reach a fruitful conclusion because it detaches the research on this issue from its overarching principles. Personal finance products should be understood within the framework of the foundations and rules of Islamic finance.
Contemporary jurisprudential research predominantly deals with personal finance products as a contemporary issue. There are two main approaches among contemporary scholars in dealing with modern financial developments, namely:
The first: The approach of scholars who focus on the pillars and conditions of the contract and the avoidance of its invalidating factors. If the condition of possession is met in personal finance products and superficiality is absent, then it is permissible because the general rule in transactions is permissibility.
The second: The approach of scholars who prioritize the outcomes and objectives (Maqasid). The reality of personal finance is cash for cash with an increase, and this is a circumvention of Riba (usury). The intervening contracts are of no consequence because they are not the intended purpose.
Merely examining the different opinions and their evidence may not be very beneficial unless we understand the root of the issue. Personal finance products stem from the foundational principles and rules of Islamic finance that distinguish it from interest-based finance.
Among the most prominent principles upon which Islamic finance is based is the achievement of economic efficiency through the diversification of contracts and their comprehensiveness of various economic activities. For example, the manufacturing sector needs the Istisna' (a sale transaction where commodity is transacted before it comes into existence) contract, the commodity financing sector needs the Murabaha (an Islamic financing structure that works as a sales contract, fixing the price of goods or items as required by a customer, inclusive of a pre-agreed profit margin) contract, the service financing sector needs the Ijara Mawsoofa bi al-Dhimma (forward lease) contract, and the investment sector needs the Mudaraba (profit-sharing) and Musharaka (partnership) contracts.
As for interest-based finance, it primarily addresses people's need for cash and essentially has only one contract, whose forms may vary but ultimately returns to the loan with interest.
Personal finance products address people's need for cash, thus they are classified as cash financing products. They are preferred by both the bank and the clients over many other Sharia-compliant contracts because they are considered less risky for the bank and their procedures are simpler for the clients.
Therefore, the expansion in the application of personal finance products distorts the structure of Islamic finance and makes the difference between it and interest-based finance superficial. It limits the efforts of Islamic banks to achieve economic efficiency, which requires Islamic banks to meet the needs of people in various economic sectors and diversify Islamic financial products in a way that suits these different sectors.
Finally, we found that the largest scholarly institution that has permitted personal finance products (banking finance) with Sharia-compliant controls is the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). It stipulated that banking Tawarruq is permissible for necessity, under specific conditions, and not as a form of financing or investment.

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Summarized Fatawaa

What is the ruling of Islamic Law on performing ṭawāf on the upper floors of al-Masjid al-Ḥarām, given that these floors are situated above the level of the Ka‘bah, and that the one performing ṭawāf passes by certain barriers, such as pillars and walls, during the ṭawāf?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah ﷺ.
There are numerous conditions for the validity of ṭawāf (circumambulation around the Ka‘bah), among them: that the one performing ṭawāf be inside the Masjid (al-Masjid al-Ḥarām) — even if the Masjid has been expanded, so long as the expansion does not extend out into al-ḥill (land outside the sanctuary boundaries). It suffices for the ṭawāf to be performed in the airspace of the Masjid or upon its roof, even if that roof is higher than the Ka‘bah (the House) itself.
Al-Khaṭīb ash-Shirbīnī (raḥimahullāh) said: "It [ṭawāf] is valid upon the roof of the Masjid, even if the roof of the Masjid is higher than the House — just as prayer [is valid] upon Mount Abū Qubays despite its elevation above the House. This is the relied-upon (mu‘tamad) position." [Mughnī al-Muḥtāj, Vol.2/P.246]
The validity of the tawaf isn`t affected by the pillars and walls standing between the one performing ṭawāf and the House, since the condition is only that the person performing ṭawāf be within the boundaries of the Masjid and outside the boundaries of the Ka‘bah itself.
Ash-Shirbīnī said: "It [ṭawāf] is valid inside the Masjid, even if it is expanded, and even if a barrier stands between the one circumambulating and the House — such as a water-supply structure (saqāyah) or pillars (sawārī)." [Mughnī al-Muḥtāj, Vol. 2/P.246]
Accordingly, ṭawāf performed on the upper floors is valid, and the presence of barriers such as pillars and walls during the ṭawāf does not affect its validity. And Allah, the Exalted, knows best.

The Jurisprudential Significance of the Ḥadīth: "Whoever says, at the conclusion of the Fajr Prayer, while crossing his legs, before speaking..."
"Whoever says, at the conclusion of the Fajr prayer, while crossing his legs, before speaking: 'Lā ilāha illā Allāh, waḥdahu lā sharīka lah, lahu al-mulku wa lahu al-ḥamdu yuḥyī wa yumītu wa huwa ʿalā kulli shayʾin qadīr' ten times — ten good deeds will be recorded for him, ten bad deeds will be erased from him, he will be raised ten levels, he will spend that day in protection from everything disliked and guarded from the devil, and no sin will be able to befall him on that day except associating partners with Allah" — does this noble ḥadīth apply to the imam, and what is meant by "extraneous speech"?

All praise is due to Allah, and peace and blessings be upon our master the Messenger of Allah ﷺ.
It is recommended for both the imam and those praying behind him to recite, immediately after the final salām, the specific remembrance reported in the sunnah to be said before turning away from one's place of prayer. The imam then leaves his praying spot, and the act of "turning" is fulfilled when the imam faces the congregation — even without physically leaving his spot — by positioning his right side toward them and his left side toward the qiblah, and this applies even while he is engaged in supplication.
Al-ʿAllāmah Ibn Qāsim al-ʿAbbādī states in his Ḥāshiyah ʿalā al-Tuḥfah (Vol.2/P.105): "It is most virtuous for the imam, once he has given the salām, to rise from his place of prayer immediately afterward." He adds that an exception must be made for the remembrances that are specifically required to be recited before he turns away. He then notes, citing Sharḥ al-ʿUbāb: "Yes, an exception to this rising immediately after the salām applies to the Fajr prayer, due to the authentic report that the Prophet ﷺ, when he prayed Fajr, would remain seated until the sun rose." He further cites, from al-Khādim, the ḥadīth concerning one who recites, at the conclusion of the Fajr prayer while still in the position of crossing his leg to rise: "Lā ilāha illā Allāh, waḥdahu lā sharīka lah..." and the rest of the well-known ḥadīth. He comments that this makes explicit that this particular remembrance is to be recited before the worshipper turns his legs to leave, and the same applies to Maghrib and ʿAṣr, as reported in those contexts as well.
What is meant by "speech" in the relevant ḥadīth is extraneous worldly speech that is not called for after the prayer and for which there is no legitimate excuse. The remembrances reported to be recited upon concluding the prayer, however, do not fall under this category of extraneous speech, since they are themselves required by the sharīʿah.
Al-ʿAllāmah ʿAlī al-Shabrāmalsī states in his Ḥāshiyah ʿalā al-Nihāyah (Vol.1/P.551): "If someone greets a person with salām while he is occupied with reciting this remembrance [i.e., 'Lā ilāha illā Allāh...'], should he return the greeting — without this causing him to forfeit the promised reward, since he is engaged in an obligatory matter — or should he delay returning the greeting until he finishes, this being a legitimate excuse for the delay?" He continues: "I say: the more likely view is the former, and the prohibition on speech is to be understood as applying to extraneous speech for which there is no legitimate excuse. Based on this, should the worshipper give precedence to this remembrance ('Lā ilāha illā Allāh...') or to reciting Sūrat al-Ikhlāṣ ('Qul huwa Allāhu aḥad')? This requires consideration, though it is not unlikely that the remembrance takes precedence, given that the Lawgiver urged hastening to it through his words 'while crossing his leg.' This is not considered ordinary speech, since it is not extraneous to what is required after the prayer."
Accordingly, it is recommended for both the imam and those praying behind him to recite this remembrance and to give it precedence over the other remembrances of the prayer, ensuring it is said before they move from their place. And Allah the Almighty knows best.

What is the Du`a (supplication) of Istikhara (guidance prayer)?

O Allah, I consult You as You are All-Knowing and I appeal to You to give me power as You are Omnipotent, I ask You for Your great favor, for You have power and I do not, and You know all of the hidden matters. O Allah! If you know that this matter (then he should mention it) is good for me in my religion, my livelihood, and for my life in the Hereafter, or he said: "for my present and future life" then make it (easy) for me. And if you know that this matter is not good for me in my religion, my livelihood and my life in the Hereafter, or he said: "for my present and future life" then keep it away from me and take me away from it and choose what is good for me wherever it is and please me with it."

What is the ruling of Islamic Law regarding one who purchases a sacrificial animal (uḍḥiyah) and it then develops a defect before slaughter?

Praise be to Allah, and peace and blessings upon our master, the Messenger of Allah.
If a defect that invalidates the sacrifice (uḍḥiyah) arises after its purchase — for example, if one purchased a sound, defect-free animal, and it then developed a limp, blindness in one eye, or a similar defect before slaughter — it does not fulfill the requirement of a valid uḍḥiyah, according to the Shāfi'ī school.
It is stated in Asnā al-Maṭālib fī Sharḥ Rawḍ al-Ṭālib (Vol.1/P.535): "Even if the limp develops [in the animal] while the knife is upon it, it still does not fulfill the requirement, because it is lame at the moment of slaughter — this is analogous to a case where a sheep's leg breaks and one hastens to slaughter it [in that condition]."
The Ḥanbalī school, however, held that if the one offering the sacrifice purchased the animal while it was sound and defect-free, and a defect then befell it afterward, the sacrifice remains valid and there is no obligation to replace it.
It is stated in Masā'il al-Imām Aḥmad, one of the Ḥanbalī reference works (Vol.8/P.4021): "I said: If a person purchases the sacrificial animal while it is sound, and it is then afflicted with illness, blindness in one eye, or a broken limb [before slaughter]? He [Imam Aḥmad] said: It is said that it still fulfills the requirement. Isḥāq said likewise, because he purchased it while sound, and the defect befell it only afterward, so it remains sufficient on his behalf." [End of quote]
Accordingly, a sheep afflicted with a defect that invalidates the sacrifice does not fulfill the requirement of a valid uḍḥiyah — whether the defect arose after purchase or during the slaughter itself — according to the Shāfi'ī school. However, there is no objection to following the Ḥanbalī position on this matter [as a valid alternative]. And Allah, the Most High, knows best.

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