Islamic Finance – Part 1

Episode Notes

Islamic Finance – Part I (Riba) By Sheikh Hacene Chebbani

Sheikh Hacene discusses Riba under the topic of Islamic Finance

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hamdu Lillahi Rabbil alameen wa salatu salam ala

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Muhammad, wa ala alihi wa sahbihi Ishmael.

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To begin with, we all know that our Deen

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is divided into two major parts. First part is aqeedah. And the second part is Sharia.

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So aqidah the maintenance of faith in Al Qaeda, his belief in the last panel doll and his books, messengers, prophets and messengers, the day of judgment, belief in angels, and I'll call her Heidi who was sorry, these are the main tenants of faith, there are some other concepts that we have to believe in them, some items that we have to believe in them, like I will cover what will happen in the grave gender, and not and everything. Those are included in belief in the Day of Judgment. And we have Sherry out which is divided into two main sections. The first section is labor that she's acts of worship, and the section, the second section is called Mr. mallette. And in more omelette,

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we have physical business transactions, we have family law, we have judicial system and so on.

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We have many issues. So physical finance of business transactions, belongs to this section of Sharia, which is in my omelette.

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There is a beautiful rule that many scholars have supported, which says that all business transactions are permissible and less forbidden by revelation

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allows lowfield morality liva illa Ada

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Henry much below sin. So which means that Allah subhanaw taala has created this universe for humans to enjoy and to use.

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But he excluded few items that are Haram.

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So Allah says by default, everything is halab unless it is forbidden by revelation by a text from the Quran, or the Sunnah of Rasulullah sallallahu alayhi wasallam. So when we come to something, and we don't know if it is halal or haram, by default, it should be halal. If someone comes and tells us that this is haram, then we have to tell him, you need to provide a proof.

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But if someone comes and introduce a new or Avada

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by default, it shouldn't be accepted. We tell him, Hey, stop here. What is your proof because last lofi, la verdad hareem. We're not supposed to come up with the new rebar that we are not supposed to introduce a new axial force ship into the deep. So every act of force shape has to be supported by an evidence. But when it comes to marmelade, for example, business of transaction

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transactions or business transactions or anything like that, of that nature, if someone must enter in any country in United States or Canada or Russia or Europe or LA or an Arab country comes up with a with a transaction, we don't tell him right away. It's haram because this is not found in the corner. The sooner we study, we look carefully. Does it include Reba? Does it include her does it include a product that is not halen so there we come up with the conclusion. So we don't rush into conclusion, we don't say this haram unless there is an evidence that it includes one of the basic prohibitions. So what are the basic prohibitions in favor of business? The first one is ban on

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River.

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All types of usury are Hara. And tonight we will talk about what is the nature of river and the second basic prohibition is an error. It's called an error in Arabic, or it's called uncertainty l Johanna. Any transaction that includes a fundamental uncertainty,

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uncertainty regarding the theremin, the price or the product itself.

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But earlier they said small amount of water should be tolerated.

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I'll give you an example. If someone is my friend, someone is got a car that is that needs some repair.

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He got some damage in his car and he goes to the mechanic and tell him I need this

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I need this car to be fixed as soon as possible.

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And the mechanic will will look at it and say, Okay, I'll fix it for you come back tomorrow, and it will be ready for you.

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How much? Oh, don't worry about it. We are friends we know each other

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RV, man tell if

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it's okay, it's fine.

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Then he goes, the guy goes and comes back tomorrow

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and then ask about the price and the price is $500. And he'll be shocked. I didn't expect it to be this way. And there will be

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there will be a dispute between the two parties Why? Because there is a horror The price was not was not you know, stipulated was not mentioned in the transaction at least the only the mechanic maybe he doesn't know how much it will cost him but he can give him a roughly at least you should ask for any a price range what is the range between 405 100 between four to 500? You have to have an idea before saying okay, because telling it before telling him go ahead and do it. I know a friend of mine he just have a car that needed he had he had to change the the door passenger side door I think and then he went to the The Body Shop and I told him I need this this door to be fixed and

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everything. He said that we'll change it for you replace another one or paint it everything will be fine. How much? Is it? No, don't worry about it, when I said when I came back to him after one week, he said 1200 and I did not expect this this price. So there was a dispute between the two of them. And the end he ended up paying like 908 100 but this is a big difference here.

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So, in Sharia, when you buy something, you have to know the price, and you have to know the description and the qualities of this product what you are buying,

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but there is a small amount of horror uncertainty that could be tolerated. And there is no way you can remove it, for example, someone who is coming to Farmer comes to a farmer to buy some carrots

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and all the carrots are in the soil or in the ground. So, to remind you to have an idea about these carrots, this product, I might take one or two but he cannot take all the carriers to show them to him

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or he is buying watermelon method in a truck full of watermelon, he cannot open all the watermelon or saw him if they are red, and they are good ready to be consumed. He cannot do that. But he can open two or three as as a sample. So now you get an idea. But still there is a harder there is uncertainty because he didn't get an idea about the whole, you know, quantity, whole quantity of watermelon or, or carrots or vegetables you didn't get have a good full detail idea about you know the quality or the you know the quality of this this product. So this is this is or that this

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could be tolerated in Syria, and it's helpful to do it this way.

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And the only amount of loss SLM has mentioned many types of horror. We will talk about them when we talk about her inshallah, when we do our series our course in January in February, the third and basic prohibition, they said prohibition against dealings with forbidden products and forbidden products are known pork, alcohol, gambling and so on. Anything that is haram. So these three basic prohibitions cover may be between 80% to 90% of prohibited business transactions. There are some other transactions that are Hilaire Percy, but he could be

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you know, they could be made Haram.

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For another reason, like someone is selling grapes.

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And a customer comes to him to buy some grapes. And he's sure he's positively confident that this man is making wine with this grapes. Then it becomes haram for this immersion or these farmers to sell him his grapes. Because he knew he knows. He knows that this guy is making wine. So it's harder. But if he doesn't know, it is know that this guy is making wine and he comes and buys grapes from him and then after a while he discovers that the guy is his customer is making wine. Then it's big. It's okay. It's fine. His transaction is valid because he didn't know or someone selling

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weapons and arms to again

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are people who you know are criminals or people who are fighting like two groups of Muslims who are fighting with each other. This is a fitna and he would sell one party, weapons and arms those This is haram even though selling weapons by itself is halen, but when it comes to selling to these kinds of people who are killing each other people are committing crimes, then the transaction becomes Hara is not haram because a free bar or a hora or it includes anything that is prohibited but because there is another no an external factor that made it harder

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time when it comes to Reba. Reba in the Quran, Allah subhanaw taala has treated the subjects in four places in the Quran. So the first is the talked about Riba or the mentioned the word Riba is insurance your room and it was revealed during the meccan period when our solar lights on olalia was Ellen was in Makkah oma I think two men ribbon leer woofie marinas for layer boreen de la. So last panthella said and whatever you give, so that it may increase in the wealth of people, it has not increased with Allah. That means Allah, Allah will not reward you for it Allah Subhana Allah will not give you any rewards for it. But this word of Riba that is mentioned in this I inserted a rule

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in Sorrento Rome

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has two explanations. There is a group of scholars who said that Allah subhanaw taala, meant by the word Riba here interest the charging of interest. But the majority of scholars, they said, No, Allah Subhana Allah did not mean the charging of interest. Rather, he meant that when someone gives a gift, when he's offering a gift with the intention, or receiving something greater, or doing a favor to someone helping him with someone with the intention that the other person would help him when he's in need, or getting something in return pants. So the owner Matthew said, majority of scholars, they believe that this is the meaning of the word the Rebbe in Surah to rule based on this

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interpretation, then Allah subhanho wa Taala did not treat the subject to FREEbird during the meccan period, when also Lysa la new Salem was still in Makkah below to Allah and there is here no halal or haram mentioned in this is the second I was in Surah Nisa, it was revealed when our pseudo lies will allow us to sell them want to a city of Medina in the first year. And this is talking about and their habits are practice of charging interest where the mill River Walk New Haven where clean water and nasty will bottom and this is in Surah Nisa 161. So Allah Subhana Allah says and because of the charging Riba, while they were prohibited from it, and this is an it sort of denisa as I see is a

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sad, verse 161. So the message here is that Allah subhanaw taala is not pleased with these people. People, Allah subhanaw taala made it harder for them to deal with Riba to deal with interest and yet they are charging interest they are dealing with River Valley last rites Allah is not displeased with is not pleased with them. But there is a hint here, there is no message that is sent to Muslims. But the last note Allah is preparing the Muslims to accept this ruling new ruling, the same story the same gradual process that took place while Allah subhanho wa Taala.

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forbade a hammer wine, he did not forbade a hammer from he did not forbidden hammer from from day one, but Allah subhanho wa Taala you know, four way to hammer through a gradual process on the steps. So here he is telling them that they are dealing with Riba Allah spent Allah is not happy with them. He made it haram to them. That's all.

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This is this is the message that is sent to the Muslims in the first year after the Asian of Rasulullah sallallahu produsen.

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Then the next day a lot. He said the aroma, the aroma of their seals. They said it was revealed in Surah le Emraan just before the Battle of IRD. And the battle took place in the month of show well in the third year after the hegira of Rasulullah sallallahu alayhi wasallam. It was the seventh of

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the seventh of February.

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In the third year after the seizure of rasuluh, lice and alarms, so in this in this surah Allah subhanaw taala said in any Mr. Yeah you have levena Amano kulu River above and madatha who you have believed do not eat up river doubled and multiplied and this is as I said in Surah Emraan 130 the I 130. Here dealing with Riba was forbidden for Muslims in Express terms, because the last month Allah said yeah, you have levena Amano letter kulu Riba and this is nice, do not consume river and marae. Nay in Sharia implies forbiddance right away, when a comes from Allah subhanho wa Taala on his messengers on the low on insulin, it implies forbidden that you know what is mentioned in this

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injection in this ayah and this instruction is forbidden is Hara. Unless there is another proof, another delete another Hadith another ayah that suggests that the ne that was mentioned in the other ayah is only for is only it means mcru it does not mean Hara Willow to Allah Allah

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pray the last verse is set verses about Reba are found in Surah Al Baqarah, one page from a 175 175 to one to 275 to 281. And this is in Surah Al Baqarah. And these are the last ayah we revealed about Riba before Rasulullah sallallahu alayhi wa sallam passed away. In this ayat, Allah subhanho wa Taala has forbidden Riba in the strongest terms, because he said the one who consume river is like the one who stands like someone driven by madness, or driven to madness by a touch of shaitan alladhina coluna River Lake como una de la cama como la da da Baku shaytaan minimus says the more you consume, Riva will stand up on the Day of Judgment like someone who's crazy, who was touched by

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a shaitan.

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So and then in this is also one to 75 to 281, Allah subhanaw taala said if you do not give up dealing with river, if you do not stop dealing with river then take a notice of war. And this is the only sin the only sin that the notice of form was mentioned associated with it. Take a notice of war from Allah subhana wa tada and His Messenger sallallahu alayhi wa sallam

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and then Allah subhanaw taala in in this ayat also has permitted trade and prohibited River. Trade in general is permitted but there are some types of trade that are Haram. We'll also talk about them in details in our course, inshallah. Five, what is the purpose? What is the purpose of imposing this ruling? The rule of

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you know, prohibiting River.

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So the earlier man, he said the main purpose is to establish justice for everyone. Because every river is increase. Okay. And sometimes it is difficult to understand the concept of justice that is linked with River. Two, there are many people who argue that, you know, if I have money and give a loan to someone, and he's using it in business, and he's making profit is only normal that he gets some may share some of his profit.

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So, I charged him some interest. And this is justice This is furnace by Islam tells you know, you cannot charge interest, but you can do it in a different way there is an alternative, which called pls Profit and Loss sharing, and mudaraba. Of course, we don't go for this nowadays for this option because of other issues, other problems that we have in our communities, but this is the alternative that the last pantallas given to Muslim and mudaraba which is Profit and Loss sharing instead of river. I will talk about river why rebuys Hara we mentioned some examples.

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Or we try to elaborate on the concept of justice here. Because Allah subhanaw taala said in this ayah Atilla Baqarah and if you repent,

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you will capital is yours to keep so you keep only your capital, you will neither inflict nor suffer iniquity. laterally move our latos law moon. This was the last battle I said. These are the words of Allah subhanaw taala in Surah tillbaka and zoom here is like it's oppression is against justice. That means if you keep your capital, then you are doing justice. So a Muslim is supposed to give a loan to his brother

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without charging any interest and all the earlier Maddie said loans are contract of sale contracts with charity and Muslim is not supposed to charge anything anything extra for his loan. If you do want to give a loan, then you can you can go to the other option which is partnership or modaraba Profit and Loss sharing.

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These type of Riba is called in the Quran, Riba and nesea. And their owner may have defined this ribbon as he as he said, the loan given for a stipulated period with a stipulated increase on the principle payable by the debtor. This is the definition of Riba amnezia But there is another name that the owner may use that I prefer the second name, which is Riba Do you Riba Do you own or do you own means loans or river gurus, and it was commonplace during the gi helia. During the pre Islamic era, it was widely practiced. And this is the river that the Quran mentioned.

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In the Sunnah, Allah Subhana Allah Rasulullah sallallahu alayhi wa sallam has talked in details in detail about about Riba and the hadith of Riba are divided into different types. The first type of Riba they are meant to admonish Muslims to stay away from the sin of river

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and the second types of ahaadeeth.

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The second group of ahaadeeth introduced the second type of River, which is called the river L Bu.

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It has include introduce river alfalfa, which is a river of surplus we'll talk about it and it is in transaction of commodities and currency trading, because as we realize the low alio silom has mentioned six items, four of them are food, and two of them are money. They are currency he mentioned gold and silver.

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And these type of Riba as I said, it's introduced by the Sunnah of Rasulullah sallallahu Sallam it is not found in the Quran Rasulullah Salim said in a hadith

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collected by Imam Al Bukhari and Muslim he said a Stanley will a separate movie part avoid the seven heinous crimes and these are major sins major sins and He mentioned seven among them if killing someone without any right a professing magic

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devour devouring the property of the orphans and he mentioned around seven crimes among them. He mentioned devouring usually devouring, eating, consuming, taking usually some Muslims and fortunately they believe that you know what is haram is to take to charge interest will end giving interest. paying interest is not Hara. It's fine. And this federalize is very common. I mean, many people believe in this to make an excuse for themselves. So they can buy houses or can take loans from banks and end up paying interest. But the next Hanif is refuting this concept here this idea in the next hadrosaur lies

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next Heidi says, which was collected by Muslim Lana Rasulullah saw Salaam Lana Akela Reba will mukalla who work at Eva who will shahidi wirkkala whomsoever Solas SLM has cursed the receiver of river, the one who is charging interest like bank or a financial institution or a wealthy person who is charging interest. So he has cursed the receiver of Riba and the payer of interest, the one who is paying and the one who records it, who want to the one who is recording the contract. And the two witnesses, the two witnesses, when you have a contract and you bring two witnesses, and they signed the contract with you, and he said they are alike in guilt. This was Rasulullah Salim said, because

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they are they are part of the process, they are all helping in the process. Like when he was the one who makes wine, the one who sells it to one for advertise for it, the one who carries it who was the one who and he curse everyone who is involved in the making of wine, and selling of wine. So here is doing the same thing Allah is Salatu was Salam.

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The second group of ahaadeeth in this second group of hobbies, as I said, that also relies on a low annual sanlam introduced the Rebbe alpha model, which is

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Rebbe have surplus. So you give I give you one kilograms of dates and he gives me two kilograms of date, higher quality for two kilograms of lower quality. So this is also Lhasa sambisa he said it is River. So there are many a hadith that mentioned this type of Riba. He said gold for gold available with the hub will filter to will filter silver for silver, wheat for wheat, barley for barley dates for dates and salt for salt like for like equal for equal and hand to hand if the commodity is different than you may sell as you wish, provided that exchange is hand to hand. So he mentioned four types of food. He mentioned date barley, and wheat and salt. And mentioned two types two other

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items, and they are money at that time they use their currency was golden dinar. And and they are they are Durham. They used to use their ham and dinars. They did hams were made of silver and their dinars were made of gold, because he mentioned the dinar and there have been some other ahaadeeth but their own amount they said based on all these ahaadeeth whether the gold is minted or is not minted, it has to be sold equally if it is exchanged, and it has to be hand to hand. So the two types of

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currency gold and silver, their own mid said la la, la la when we talk about NPS you know the sources of sherry are four, four main sources of Sharia, the Quran, the Book of Allah subhanho wa Taala, the Sunnah of His Messenger sallallahu alayhi wa sallam, elishama consensus and Ks which is analogy, when you have

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a hokum Sherry arrow ruling, but he's well known It is revealed in the Quran and the Sunnah. And you have something else, something you knew, that is not found that doesn't have a Sheree eroding that is found in the Quran and the Sunnah. I'll give you an example. Matheran cigarettes or smoking was introduced into the Muslim world, in the 16th century in in Turkey through Europe, people a Turkish people got it from Europeans. So when the scholars looked at smoking at that time, the 16th century, they said okay, this is something that is not found in the Quran and Sunnah we don't have a Sharia ruling regarding, should he? Is it halal or haram, or MOBA? or mcru or Mr. hab so they have to come

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up with a ruling. We have five famous ruling in also in fact, was it and haram worship is an obligation or we get to read haram forbidden. Mubarak permissible. MOBA, Mr. hab recommanded and makuu disliked anything in this life has one one of these rulings applies to it. Anything in this life, even going to the moon, anything, anything you do in this life, one of these five Sherry rulings has to apply to it. So now he said no, what is the ruling of smoking or cigarettes or tobacco, they looked at it and we didn't have knowledge this tobacco affects the health of a fearful so they said it has a bad smell. And also last esalaam said if you eat or consume garlic, and

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an audience will not come to the masjid because of their bad smell. But they are not heard of garlic and onions are not heard on that only macro and if you eat them you don't come to the message because you don't want to hurt other people. So they said this smoking must be macro. That was their initial ruling he had the exercise their their power of HD had in have any sorts of knowledge about it. They didn't know that it hurts the body it causes major diseases. They are after one one Muslim scholars, they knew about the effects of smoking on on our health, then we have no doubt now that it is haram. But what we did first it was a PS is called analogy because they have the Sharia ruling

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regarding garlic. And this is something new that doesn't have Sharia ruling.

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So rule number odema here when they looked at this hadith of Rasulullah sallallahu SLM

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we asked a question did he mean only golden silver and only these four items, or these items are just samples are just examples and there must be a law and we call it the effective cause injury and Ts in

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this endler this is the one this elder transfers the ruling so they're in the here of bad smell in

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Garlic helped us to transfer the ruling from garlic to smoking tobacco. So, he said we have to find a letter find a lawyer with this ahaadeeth. So, they said there are four golden silver and this is opening the majority of scholars is familiar. What is it familiar? Is this ad he forbidden he has forbidden river, because they are a medium of exchange, they are money, they are a currency that is used. So, anything that is money that is a medium of exchange accepted medium of exchange in any society when the rulings of Riba should apply to it. And now that's why the ruling of Riba applies to the paper money that we have, at the time of Rasulullah sallallahu Sallam did not have paper

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money, he had only golden silver. Now how come we are saying if I go to the bank, take 10,000 and then to pay them back like 11,000 after one year, how come you're saying it's Riba and also relies on a low valuation and did not mention paper money here. He mentioned only golden silver. Now the majority of scholars the three major organizations in the Muslim world,

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the Muslim council that belongs to the Muslim World League arrabiata Islamic the Muslim council that belongs to the Organisation of Islamic countries, while Adama till Mortimer Mortimer a dual Islamia and another major filter Council in Pakistan, all these major three major organizations and the Muslim world, all of them agree on this, that Allah Allah here the effective cause is that gold or gold and silver, were money at the time for pseudo lies, I sell them and then if money takes any form, the rulings of Riba will apply to it. As a matter of fact, Omar mahapatra the Allahu anhu thought of his time to print money from the skin of camels, and all the Sahaba who is sitting around

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him. This is Carlos either la Emelia hurry Fatah, Su de la Miramar, meaning they did not have an objection against printing money

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making money from skin of camels, they didn't have problem with that. So they had in mind that money could take any form. They didn't have problem with that money could be gold and silver could be anything else. They had the the will concern about, about about camels, they said camels will perish. People start slaughtering camels and making money.

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They said even can all camels will perish here meaning meaning and then he changed his mind and he magmatic he said if people adopt another form of money, I will apply the rules of Riba to it. These words will Eman Malik said classical scholars scholars who belong our motto is a Sahaba halifa Rasulullah salah and all of them they had this idea that money can take any form and if he takes any form then the rules of Riba will be applied to it will allow to Allah Allah

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the the other food items, of course there India is very controversial. So Marina, Maddy said Rasul Allah says animation these four items because they were the basic food items and they were suitable for storage. So they were used widely used in the Medina and society in the Arabian society at that time, and they were their basic food and also last Asilomar to to establish justice, when it comes to the transaction of these basic foods. So this is the opinion basically in the Maliki method in the Hanafi madhhab in one version in the hanbali method, which actually they are suitable for measurement, either through weight or volume to karlova choose an arrowhead Elijah to karwa tussah.

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So they are suitable for measurement either through volume or weight. This is the inla in the Hanafi madhhab and one version in the Hanbury letter, Mr. Mushaf. He believes that because they are food,

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they are food they are types of food and so last SLM wanted to establish justice in the transactions of food items. So based on the opinion of Mr. Michel ferry, any type of food you cannot sell it You cannot say two kilograms of apples for example, for one kilogram if the quality is different, based on the opinion of Mr. Shafi, but based on the opinion of Lima Malik, this is Hillel. But if this is a basic food like rice, then Riba the rules of Riba would apply to it. Now we don't have problem with this.

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We don't have problem with this people are not going to the market with a kilogram one kilogram of rice, looking for another two kilograms of rice, or one kilogram kg of dates and looking for another two kg of dates, we don't have this practice. Now, we don't have this problem with so we don't have to worry about the differences of the scholars disagreement regarding Elena, within these four items of food, but you have to make sure that these four items, if you have some dates, and you want to exchange it with a friend of yours, he has a different date, date, some dates that have different quality and you want to give him one key and He will give you two keys, this is the ribbon you just

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have this is something that you need to keep in mind. But nowadays people are not doing these things. People are dealing with money. The problem is people are trying to make it happen

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to make this Reba Hello. And as a matter of fact,

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Shay from allows her from from Egypt a couple of years ago. He was trying to say that the interest that the bank is changing the banks banks are changing is not River. It is sharing in profits. So it's Helen based on him based on his opinion, but it was widely rejected his opinion was widely rejected all the aroma of Islam rejected his opinion they have written books against his federal law. And they and no one accepted his federal I was appointed by President Mubarak and people lionni have doubt about his intention and how his purpose will love to Allah Allah because he has made other weird photographers about his job and his job in France and all some kind of food

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photographers. Allah Allah Allah, Allah Salah Mahaffey anyway, but this is something that is agreed upon that the interest that is being charged by banks now. It is a river that the last panel fatality is the same type of Riba that the Lost Planet Allah has mentioned in the Quran.

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There are two major classifications of Riba in the books. So there is something called Riba and nesea and Riba and fuddle as I said, Riba and nesea is the delay the waiting period. So we have have what 100 grams of gold. I gave it to you today. You give me another 100 grams of gold tomorrow with a different quality for example, tomorrow. Then this is rebar and Messier because it's not hand to hand there is a waiting period, there is 24 hours or a week or a month. So transactions of gold and silver and money has to be on the spot. If I go to the bank to exchange money have Canadian dollars, I want some American dollars. It has to be on the spot. It has to be on the spot hand to have the

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bank cannot tell you come back tomorrow you take her money.

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This is if you do it hand to hand this is called public happy real possession. But if the bank transfers this money, this money that is converted, what is converted, if it transfer if it is transferred to your bank account, and you have direct access, you have instant access to your bank account. This is called COVID. Hook me and it is Helen is called constructive possession. And it is hilarities accepted widely accepted now because they said the road Emma yes you didn't get it. You didn't receive it in your hand. But you have access to it if you go to the bank machine. You are allowed to take your money. No one can stop you from taking your money. So they call it to hook me

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and it is Helen but we have to be careful about the hook me because many people when they knew about it, they started making up their own photographers about cover the hook me but then and I'll give you an example about something that could be that could look like a cop the hook reconstructive control possessions but it is not constructive transit a possession. Nowadays banks they sell silver and gold, you go and buy silver from them. And you want to keep it with a bank and you want to take a certificate.

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If the silver is is in the bank,

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if they give you a box and they give you a key and you take the silver and you leave it in the bank, you didn't take it you leave it there and you close the box. So there is a real possession here. Let's say that you don't have a box but you want to leave silver with them. And they give you a certificate you say I have a certificate this certificate is approved that they own the silver.

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How about if you come back to them tomorrow or after two days and said I want my silver

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You could be shocked. They might tell you we don't have silver, you have to wait for fit, give us give us a notice. We'll buy silver for you and give it to you that means you don't have access to your silver. So, this transaction is Riba because there is no

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there is no cover, there is no real no real possession, no constructive possession, but in the FPV right, the serial number of your silver or the serial number of your gold, when they give you the serial number that means this is your silver and it is available it is there It has a serial number. This is a constructive possession because you know silver is there available for you, that could be different. So and some earlier Maddy said try to avoid it, if you buy silver, give them money, get your silver just to be in the safe side. Whenever they give you a silver serial number that means the silver is available and it is for you kept voting for you are allowed to Allah. So when it comes

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to constructive possession, we have to be careful

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Riba alpha, fertilize, I said means surplus. If I give you 100 grams of gold, you give me 110 these 10 grams of gold is an extra amount. So this is all fertile, this is surplus and is it is the river, we did it on the spot hand to hand. But this amount this extra amount is not accepted in Sharia. This is an example just to simplify this concept of Riba alpha we have Riba alpha route which was mentioned in the Quran, and it was widely practiced during the time of Jia helia. Before

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Salah was sent as a messenger to this Boomer and we have Reba l boo which was mentioned in this ahaadeeth I just mentioned, Rebel boo you could include rebel phone and ribbon in the car, there is something extra something an extra amount that is given that is transacted and also it is not do it it is not done on the spot. There is a delay there is a waiting period, I will receive the delivery after two days or or one month or two months. So both of them could be included a rebel boo which was mentioned in the Sunnah, ribbon nesea and Riba and alpha it'll

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play some role and I have talked about some economic problems and evil effects of Riba generally speaking, getting the sad

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when we deal with Riba whenever becomes widely practiced, there is a great deal of Miss allocation of resources that take place, Miss allocation in every society, we have wealthy people who have money, they have many means

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they are rich, and we have the needy, you have another section, another group of people who are in need, they don't have an income, they don't have jobs, they need some help. So, now in this system, in the in the modern banking system, who are given access to loans

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who can get loan very easily those who are wealthy those who have the means, because they basically why because of the idea of collateral you have to provide the collateral

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or we call it creditworthiness. We have to look at your credit history.

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So you must have dealt with money you have a great amount of money in the bank, you have a business you are you have.

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So you have a good history with them, then they give you loans.

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But in reality, those who need loans to establish their businesses or to improve their financial situation is the ones who are in need. But these people are not given these loans.

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So there is a misallocation of resources here. There is no justice that is taking place in our societies and the gap is widening nowadays. We don't feel it here but there is a great deal of injustice that is taking place nowadays.

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With with a modern banking system, the modern banking system is taking us to a cliff they call it a cliff nowadays, financial Cliff or fiscal cliff. It is a real Cliff that we are heading towards with this banking system. So the owner man he said the same system was prevalent during the time of Jay Hillier. People believe that Allah Allah made Riba haram because it was a kind of exploitation. These loans were given to the pools and the needy at the time of jelly. No, that's not true. These loans were

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advance to the rich, the tribe leaders because they used to have caravans trad trade caravans to send them to Syria, to Yemen to other countries to Persia, and they needed these big loans. So those people used to benefit from these loans. Because many people have this idea that, you know, it was made haram because of exploitation, and there is no exploitation nowadays, I go to the bank and a bank, I buy a car, buy a car, or buy a house, and I'm happy, making money. And I got, I've been paying for this house for a long time, nothing happened, I'm happy the back is happening. So everything is fine.

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The second concept, he said injustice in the distribution of income, he said, when there is a loan that is advanced, through our banking system, injustice will take place automatically I will finish with this. So we have here depositors. And we have here our banking system in the middle. And we have in corporations and businesses and sometimes governments taking loans and and we have these people who are dealing with money,

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or using this money, the money of whom depositors because the bank itself does not have money, it might have a capital, but it's rely heavily on the money that is deposited your money and my money and the money for everyone who is depositing money in the banks. So they will give you the promise the depositors to give them 2% to maximum 6% 7% of interest. And then the charge these businesses and corporations 19% to 30% and they will the bank will make money making income or profit through this difference, they will pay these people 6% we will charge in corporations, business 19% 30% The difference is maybe 20%. This is the profit that the bank, the banks made.

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Now they said the owner, they said when these corporations, these businesses make huge profits, huge profits, then what what happened,

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he make huge profits, he paid the interest to the banks, but they give only small amount of the depositors. But he made our their their profits through our money, the depositors and we the Muslims even we're not taking these interest. And if we take it we give it as we get rid of it, we give it to other people because we don't want to use it.

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So we're using a putting our money is businesses are making profits, whose profits with them but who are not benefiting from our money. But we said if these businesses make don't lose, they don't make profits, they still have to pay the capital back to the banks and pay the interest which is 19% or 20%. Both ways in both ways there is injustice.

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In both ways. There is injustice. There are more details to be discussed in regarding these issues salasar otol, and ENSO severe de como lo phailin Baraka low FICO, and we will start again talking about the subjects of business transactions in January inshallah maybe 11th or 18th, second or third week of January, we start the series of halaqaat. But this subject, maybe for eight weeks, she's akula

Islamic Finance - Part 1
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