Trading in Islam: Shari‟ah Rules and Contemporary Applications in Islamic Financial Transactions

2014 ◽  
Vol 2 (2) ◽  
pp. 41
Author(s):  
Syed Faiq Najeeb
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Financial Industry ◽  
Secondary Sources ◽  
Critical Issues ◽  
Islamic Financial Institutions ◽  
Comprehensive Framework ◽  
Financial Transactions ◽  
Industry Needs ◽  
General Conditions

This paper attempts to comprehensively highlight the various Islamic laws and guidelines which govern contracts of exchange involving selling of goods and trading of debts. Muslim jurists have extensively researched, reasoned and deliberated over centuries in order to compile a comprehensive framework of principles Muslims are required to adhere to when engaging in selling of goods and trading of debts. This compilation is based on the rulings derived from the Quran and Sunnah and other secondary sources of Islamic law. The paper introduces the readers to various categories of exchange contracts and examines the elements which may render them valid or void along with details on the general conditions and prohibitions in Islam when it comes to trading. More importantly, the paper discusses the contemporary applications of these contracts in the modern Islamic financial industry and apprises the readers of the current Shari‟ah issues and challenges being faced by the Islamic financial institutions. The paper also highlights critical issues which the Islamic financial industry needs to overcome to sustain its tremendous growth along with a few recommendations for the industry to improve its practices in future.

scholarly journals ANALISIS FIQH MUAMALAH TENTANG HYBRID CONTRACT MODEL DAN PENERAPANNYA PADA LEMBAGA KEUANGAN SYARIAH

2014 ◽  
Vol 10 (2) ◽  
Author(s):  
Ali Amin Isfandiar
Keyword(s):  
Financial Institutions ◽  
Hybrid Models ◽  
Islamic Banks ◽  
Financial Industry ◽  
Contemporary View ◽  
Islamic Financial Institutions ◽  
Financial Transactions

This paper is intended to analyze philosophically about the existence of a hybrid contract (english) or al-‘Uqûd al-Murakkabah (Arabic) or multiakad (Indonesia). Search focused on the opinion of scholars of hadith and fiqh (muamalah), as well as its application in Islamic Financial Institutions. This is important, because, in the form of a single contract is not able to respond to contemporary financial transactions which always move and are affected by the financial industry both nationally, regionally and internationally. By using qualitative and literature method, the study concluded that, firstly, fiqh muamalah contemporary view of the hadith related to contract hybrid models lead to the editorial about the ban of bai’ataini fi bai’atin (two sale and purchase in the sale), ban of shafqataini fi shafqatin (two agreements in the deal) and the prohibition of bay’ and the salaf (sale and purchase agreement and ordering of goods), secondly, the construction of contract hybrid models in Islamic banks is addressed to the construction of al- ‘Uqûd al-Mutaqâbilah (dependent or conditional contract), which implemented on Guarantee Bank (BG), and al-‘Uqûd al-Mujtami'ah (same type contract), which implemented on the Housing Financing.

scholarly journals ANALISIS PRAKTIK MUAMALAT KOTEMPORER BAITUL MAL WAT TAMWIL

2019 ◽  
Vol 5 (2) ◽  
pp. 169-184
Author(s):  
Budi Kolistiawan
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Islamic Banking ◽  
Islamic Financial Institutions ◽  
Financial Transactions

AbstractContemporary Muamalat Practices The Baitul Mal Wat Tamwil Institution is urgently needed to sustain the sustainability of small and medium-sized businesses because the financing provided is financing with a small capital and different from financing carried out by Islamic banking. This study aims to analyze the practice of contemporary muamalat in Islamic financial institutions Baitul Mal Wat Tamwil in the Special Province of Yogyakarta. BMT Yogyakarta provides a variety of financing solutions through products offered to help people who are in accordance with Islamic law to avoid the practice of usury. Keywords : Contemporary Muamalat Practices, Financial Transactions, BMT Abstrak Praktik Muamalat Kotemporer Lembaga Baitul Mal Wat Tamwil sangat dibutuhkan untuk menopang keberlangsungan usaha-usaha kecil dan menengah karena pembiayaan yang diberikan adalah pembiayaan dengan modal yang kecil dan berbeda dengan pembiayaan yang dilakukan oleh perbankan syariah. Penelitian ini bertujuan untuk menganalisis praktek muamalat kontemporer pada lembaga keuangan syariah Baitul Mal Wat Tamwil di Provinsi Daerah Istimewa Yogyakarta. BMT Yogyakarta memberikan berbagai macam solusi pembiayaan melalui produk-produk yang ditawarkan untuk membantu masyarakat yang sesuai dengan syariat Islam agar terhindar dari praktek riba.  Kata Kunci : Praktik Muamalat Kotemporer, Transaksi Keuangan, BMT

scholarly journals QARDHUL HASAN DALAM PERSFEKTIF HUKUM ISLAM PADA BAITUL MAAL WA TAMWIL (BMT) DAN IMPLEMENTASINYA

2019 ◽  
Vol 1 (1) ◽  
pp. 44-58
Author(s):  
Muhamad Bisri Mustofa ◽  
Mifta Khatul Khoir
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Financial Institution ◽  
Social Institution ◽  
Small Communities ◽  
Economic Law ◽  
Potential Source ◽  
Islamic Financial Institutions

Abstract In the implementation of Islamic Financial Institutions such as the Baitul Maal wa Tamwil (BMT) there are various ways of collecting funds and channeling funds. Funds are collected through wadi'ah deposits and deposits. While the distribution of funds is done by murabahah, mudharabah, musyarakah, rahn (pawn), ijarah, ijarah multijasa and qardhul hasan financing. Qardhul Hasan's financing is the orientation of the function of the Islamic Financial Institution (Baitul Maal Wa Tamwil) as a social institution. Qardhul hasan is a soft loan given on the basis of mere social obligations. In this case the borrower is not required to return anything except the amount borrowed. In Qardhul Hasan financing there are pillars and conditions, namely the perpetrator of the contract consisting of muqtaridh (borrower), muqridh (lender), qardh (fund), shighat ijab and qabul willingness for both parties and funds used for something useful and lawful. Qardhul Hasan is an activity to achieve a predetermined goal or target by the relevant Islamic financial institutions. The mechanism for implementing Qardhul Hasan is solely aimed at providing assistance to meet the needs of small communities. Thus it can be seen that the form of borrowing through Qardhul Hasan is in accordance with the principles of sharia economic law, the potential source of Qardhul Hasan's funding is quite large if it is utilized and managed optimally and its implementation is very useful for the community. Keywords: Qardhul Hasan, Islamic Law, BMT

scholarly journals Collecting Fees for Safekeeping of Collateral: Rules and Applications in the Contemporary Islamic Financial Institutions

2020 ◽  
Vol 9 (1) ◽  
pp. 50-53
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Market Price ◽  
Point Of View ◽  
Actual Cost ◽  
Islamic Banks ◽  
Maturity Date ◽  
Islamic Financial Institutions

The study aims to examine the Shari’ah legality of whether pledgor or pledgee should take care of collateral (marhun) during the period of the loan. Moreover, the study seeks to provide possible applications for the pledge (rahn) and clarify Shari’ah rules for each application. Malaysian Islamic banks apply pledge products by offering loans (qardh hasan) to the customers and requesting gold assets as collateral against a loan. The banks charge safekeeping fees to keep the gold until the maturity date of the loan. This practice combines loan and sale contracts in a single transaction. Accordingly, the study seeks to evaluate this practice from an Islamic point of view. Islamic law categorizes loans under charity contracts while the sale is categorized under contracts of exchange (mu’awadhat). The nature of the two contracts is different. Therefore, the study examines categories that combine loans and contracts of exchange in one transaction. The results reveal that it is not permissible for the pledgee to charge fees higher than market fees for the keeping of collateral. Charging fees that are higher than the market price is considered riba. According to Shari’ah rules, any kind of benefit derived from a loan is riba and thus it is prohibited. However, charging fees that are comparable to the market price and cover the actual cost for safekeeping of collateral is permissible. According to Islamic Fiqh Academy resolutions and AAOIFI standards, Islamic banks may charge fees for safekeeping of gold collateral considering that fees should be to the market fees and should only cover actual expenses.

scholarly journals Penutup Aurat bagi Perempuan Transgender dalam Hukum Islam

2021 ◽  
Vol 22 (2) ◽  
pp. 167
Author(s):  
Rahayu Irhami ◽  
M. Irfan Syaifuddin ◽  
Inggit Ayuning Pandini ◽  
Shuhita Endah Palupi
Keyword(s):  
Literature Review ◽  
Financial Institutions ◽  
Oil Palm ◽  
Islamic Law ◽  
Field Research ◽  
Factory Workers ◽  
Legal Principles ◽  
Nominal Form ◽  
Islamic Financial Institutions

AbstractThis study describes the review of Islamic law related to the sale and purchase of workdays conducted by factory workers Oil palm Fabrique in Simpang Nibung Rawas Village, South Sumatra Province. This paper is field research by interviewing 13 factory workers to get an overview of buying and selling working days. This study also uses a literature review from Islamic legal sources and MUI fatwas to explain the appropriateness of buying and selling working days with Islamic legal principles. In practice, buying and selling working days is not following the provisions of the MUI DSN Fatwa because the ujrah imposed on the seller is determined by one party, the buyer, and the amount of the ujrah is expressed in terms of percentage rather than in nominal form. Besides, there is a mechanism that causes the transaction to contain gharar elements such as the sale of working days that are not yet owned, and the presence of gharar elements creates a new element, namely usury. Sales of working days that are not yet owned by workers cause at the end of the agreement the seller is required to pay the principal receivables accompanied by profits determined by the buyer that can be equated with borrowing money with interest. This research suggests that factory workers borrow funds from Islamic financial institutions that are more in line with Islamic legal guidance This research suggests factory workers not to continue the practice of buying and selling weekdays because there are elements of gharar and usury in it and to consider Islamic financial institutions and zakat institutions as a solution for lending funds.AbstrakPenelitian ini menjelaskan mengenai kajian Hukum Islam terkait jual  beli hari kerja yang dilakukan oleh buruh pabrik CV. Sawit yang ada di DesaSimpang Nibung Rawas, Provinsi Sumatera Selatan. Penelitian menggunakan pendekatan penelitian lapangan (field research) dengan mewancarai 13 buruh pabrik untuk mendapatkan gambaran praktik jual beli hari kerja. Penelitian ini juga menggunakan literature review dari sumber-sumber hukum Islam dan fatwa MUI dalam menjelaskan kesesuaian praktik jual beli hari kerja dengan prinsip hukum Islam. Dalam praktiknya jual beli hari kerja tidak sesuai dengan ketentuan Fatwa DSN MUI karena ujrah yang dikenakan kepada penjual ditentukan oleh satu pihak yaitu pembeli dan besarnya keuntungan dinyatakan dengan bentuk prosentase dan bukan dalam bentuk nominal. Selain itu, terdapat alur mekanisme yang menyebabkan bahwa transaksi tersebut mengandung unsur gharar seperti penjualan hari kerja yang belum dimiliki, serta adanya unsur gharar tersebut menimbulkan unsur baru yaitu riba. Penjualan hari kerja yang belum dimiliki oleh buruh menyebabkan saat akhir perjanjian penjual diharuskan membayar pokok piutang disertai keuntungan yang di tentukan oleh pembeli yang dapat disamakan dengan peminjaman uang dengan bunga. Penelitian ini menyarankan para buruh pabrik untuk tidak melanjutkan praktik jual beli hari kerja karena terdapat unsur gharar dan riba yang diharamkan dalam Islam serta mempertimbangkan lembaga keuangan syariah dan lembaga zakat sebagai solusi peminjaman dana. 

scholarly journals IMPLEMENTATION OF RAHN IN SHARIA GOLD FINANCING AT MODERN ISLAMIC FINANCIAL INSTITUTIONS (CASE STUDY IN BANK BRI SYARIAH BRANCH OF PEKANBARU).

Hukum Islam ◽  
2018 ◽  
Vol 18 (1) ◽  
pp. 40
Author(s):  
AHMAD MAULIDIZEN
Keyword(s):  
Data Collection ◽  
Financial Institutions ◽  
Field Research ◽  
Islamic Banking ◽  
Financial Industry ◽  
Collection Method ◽  
Data Collection Method ◽  
Islamic Financial Institutions

Islamic Financing Products have started to grow rapidly in the current banking and financial industry at this time. This situation can be seen through the increase of Islamic banking assets for several years, in addition to the inclusion of more institutions offering Islamic products. Sharia Gold Pawn Products is the delivery of marhun (collateral goods) from the rahin (customers using mortgage financing) to the bank as a guarantee of part or all of the debt. This research is field (field research) with data collection method through observation, interview and documentation study in data collection. The author concludes that the application of Rahn's contract on Sharia gold mortgage financing at Bank BRI Syariah has been in accordance with the National Sharia Board Fatwa and there are several things that must be improved so as not to conflict with Sharia principles

Analysing the AAOIFI Sharīʿah standard on zakat

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Khurram Parvez Raja
Keyword(s):  
Financial Institutions ◽  
Islamic Law ◽  
Financial Statements ◽  
Insurance Companies ◽  
Single Individual ◽  
Content Type ◽  
Long Run ◽  
Islamic Financial Institutions ◽  
The Law ◽  
Islamic Insurance

Purpose The Sharīʿah Standard No. (35) issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) aims to identify the zakāt base for institutions (including Islamic insurance companies) as well as the subsidiary and the mother company of the institution (the company). By zakāt base, the standard means the items of financial statements that should or should not be included in the calculation of the zakāt base, and the liabilities or allocations that should or should not be deducted from zakatable assets. The standard also covers payable zakāt rates, disbursement of zakāt funds on the eight categories of zakāt recipients and the rulings pertaining to disbursement. The focus then is on companies or corporations. There is no indication in the aims as to who owns the wealth of the corporation, that is, whether it is the company itself or it is the shareholders and whether it is treated as a joint wealth of the shareholders or of a single individual in the form of the company. The author will rely on this issue as one factor on the basis of which the standard is to be judged. Design/methodology/approach Quran and hadith. Works of earlier jurists. Findings In this study, the author has summarized the provisions of zakāt according to the traditional law, but only those that are relevant for the financial institutions and the standard issued by the AAOIFI. After that, the author mentioned the major points that have been addressed by the standard. In the last section, the author has shown that the rulings of the Islamic Fiqh Academy and the AAOIFI on zakāt are totally confusing and merely a reproduction of the rulings of traditional law. The main reason for this confusion is that the nature and entity of a corporation have not been addressed and have been treated like a partnership, thus, jumbling up the entire issue of zakāt through banks. Originality/value The main purpose in undertaking this original work is to examine the AAOIFI Sharīʿah Standards from the perspective of traditional Islamic law, that is, the law of the senior schools as laid down in their authentic manuals. If there is an extensive deviation from this law, then this must be pointed out in the hope that it will be corrected by the concerned institution and the banks that adopt these standards. Neglecting such a corrective action for long will result in damage not only to these institutions in the long run but also to the law of Islam that has been so carefully crafted over centuries. The purpose is to show how far this standard deviates from traditional Islamic law and claims to be called the authentic view on a particular subject. Nevertheless, it is not the purpose of this work to explain and elaborate on the meaning and utility of these standards.

Mushārakah—A Realistic Approach to the Concept in Islamic Finance and its Application to the Agricultural Sector in Pakistan

2014 ◽  
Vol 28 (1) ◽  
pp. 1-39
Author(s):  
Lutfullah Saqib ◽  
Kellie W. Roberts ◽  
Mueen A. Zafar ◽  
Khurram Khan ◽  
Aliya Zafar
Keyword(s):  
Financial Institutions ◽  
Agricultural Sector ◽  
Islamic Law ◽  
Lower Class ◽  
Islamic Finance ◽  
Financial Problems ◽  
Human Survival ◽  
Realistic Approach ◽  
Islamic Financial Institutions

Abstract Food is one of the basic necessities that is imperative for human survival. The majority of farmers related to agriculture belong to the lower class and are hence not in a position to fulfil their agricultural needs. Therefore, they must borrow from various sources, e.g., from individuals, organizations, and/or banks, using interest-based lending, which Muslims are prohibited from doing according to the Sharīʿah. Here the concept of mushārakah (participatory mode of finance) is the best option. The present work discusses the application of such transactions to overcome farmers’ financial problems. In this article, the concept of mushārakah is first elaborated in light of classical/contemporary Islamic law literature referring to its rules and regulations followed by a discussion on how mushārakah can be effectively applied to the agricultural sector. The concepts of muzāraʿah (temporary sharecropping contract), musāqah, diminishing mushārakah (al-mushārakah al-mutanāqisah), and customer agency are critically analyzed in such away to make these fit and viable for farmers and Islamic financial institutions.

scholarly journals The Regulation of Islamic Finance in the United Kingdom

2010 ◽  
Vol 13 (1) ◽  
pp. 69-77 ◽  
Author(s):  
Jonathan Ercanbrack
Keyword(s):  
United Kingdom ◽  
Financial Institutions ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Financial Industry ◽  
Religious Dimension ◽  
The United Kingdom ◽  
Islamic Financial Institutions

This article examines the unique risks associated with Islamic financial institutions and the secular state's reticence to directly regulate their religious dimension. It argues that the state's method of regulating the Islamic financial industry ignores special reputational risks associated with the religious and cultural distinctiveness of Islamic banks.

واقع الصناعة المالية الإسلامية عبر العالم

2018 ◽  
Vol 5 (1) ◽  
pp. 597-624
Keyword(s):  
Economic Development ◽  
Financial Market ◽  
Financial Institutions ◽  
Islamic Banking ◽  
International Level ◽  
Financial Industry ◽  
Positive Growth ◽  
Islamic Financial Institutions ◽  
Asset Size ◽  
Shed Light

ملخص: شهدت الصناعة المالية الإسلامية على مدى العقود الثلاثة الأخيرة تطورات هامة، على مستوى نمو الأصول والموجودات وكذلك على مستوى الانتشار الجغرافي والدولي، وبرزت أيضا كأحد مجالات المنافسة والتأثير على السوق المالي وأصبحت تساهم في التنمية الاقتصادية التي شهد نموها دوليا اتجاها إيجابيا من خلال العديد من المؤسسات المالية الإسلامية. يهدف البحث إلى تسليط الضوء على ما حققته الصناعة المالية الإسلامية ومدى انتشارها على المستوى الدولي مع إعطاء بعض النماذج للصناعة المالية الإسلامية في الدول الإسلامية وغير الإسلامية. الكلمات المفتاحية: الصناعة المالية الإسلامية، الصيرفة الإسلامية، الصكوك، الصناديق الإسلامية، التكافل. Abstract Over the last three decades, the Islamic financial industry has witnessed significant developments, both in terms of asset size and geographical spread. It has emerged as one of the areas of competition and has played a role in influencing the financial market and contributing to economic development which has witnessed positive growth due to the efforts of many Islamic Financial Institutions. The research aims to shed light on the achievements of the Islamic financial industry and its spread at the international level, while giving some examples to the Islamic financial industry in Islamic and non-Islamic countries. Keywords: Islamic Financial Industry, Islamic Banking, Sukuk, Islamic Funds, Takaful.

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