Islam Money And You
Channel: Mansoor Danish
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Assalamu alaikum warahmatullahi wabarakatuh a very warm welcome to all of you for joining us here today.
Have you ever wondered what the status of money is in Islam?
What effect does it have in your life in this world and the next? Have you ever thought about how you will be held accountable for every penny you earn and every penny you spent our lives revolve around our bank accounts and paychecks. However, we are more often than not exposed to dealings with rebar, some of which are clearly mentioned and others are hidden.
Today's webinar will touch upon all these topics and more inshallah We have with us, Adam and Sue daanish.
Rhythm and Sue is a banking professional with an MBA in finance and over eight years experience in broking, investment analysis and wealth management, as well as driving business growth through strategic sales and customer relationship programs with exceptional proficiency in handling Islamic banking operations. As a lecturer and supervisor within the Islamic banking and economics department at Islamic online university brotherman Zoo lectures in areas of Islamic Finance, Islamic financial products Islamic economics, Islamic commercial law, product and brand management,
global brand and marketing communication, service marketing, business studies and sales and distribution management without taking any more of your time I now present to you brother mensual dhanesh
Bismillah R Rahman r Rahim in Alhamdulillah Nadeau wanna stay in ohana, stop Pharaoh, when I also believe him in sure all the unforeseen a woman say Dr. Molina, Mayor de la Hoefler. medela one minute little fella howdy Allah. Wa shadow Allah Hi, Lola. Hola. Hola Sheree color. Wash. Mohammed Abu hora Zulu. Yeah, and yo holla Xena Manasa hola how hochkar to karate whether tomo tuna 11 to Muslim moon. Yeah, Johan NASA de Cora homology. Holloman nuptse wahida bahala chi minh has Elijah wa Bertha amin humare Jalan casilando Nisa what akula hola z. Luna V will or ham in Ghana aliko merkiva Yeah, yo holla Xena Amano De La Hoya Oulu Colin sadita useless la Kuma lucam wiaa philippou novacom
Oman UT la wa Sula, who, further folden azima. I'm about to find the halal Hadith eatable la wa hiral howdy howdy Muhammad sallallahu alayhi wa sallam Bashara lamorinda de ser to her wakulla, the third in VEDA wakulla with that in Allah Allah Allah, Allah Allah TV now.
At the beginning, we praise Allah subhanho wa Taala and we seek his aid and his assistance and we seek forgiveness from Allah subhanho wa Taala or We seek refuge in Allah subhanho wa Taala from the evil of our own souls, from the evil of our own actions, and whomsoever Allah guides, there is none who will be able to mislead him. Whomsoever Allah leads astray, there is none who can guide him. I testify that there is no deity worthy of worship except Allah alone without any partners. And Muhammad sallallahu alayhi wa sallam is his slave and His Messenger.
Allah subhanho wa Taala articulate in the Koran or you who believe fear Allah as he should be feared, and die not except in the state of Islam with complete submission to Allah. Allah involves the mankind Oh mankind, be dutiful to your Lord, who created you from a single person and from him he created his wife Eve, and from them both he created many men and women and fear Allah to whom you demand your mutual rights and to not cut the relation of the wombs. Surely Allah is an ever watching over you. A lot of talks to the believers, calling them all you who believe keep your duty to Allah and fear him and speak always the truth. He will direct you to righteous good deeds and forgive your
sins. And whosoever obeys a lion is messenger sallallahu alayhi wa sallam, he has indeed achieved a great achievement, which is to be saved from the Hellfire and enter Paradise. and thereafter Indeed, the best speech is the speech of Allah the Quran, and the best guidance is the guidance of Muhammad sallallahu alayhi wa sallam that is the Sunnah of the Prophet. And the worst of the matters are those which are innovated by the people and every integrated matter is called beauty.
are every bit leads to person getting a stray, and every person going astray is in the fire. And therefore we seek refuge in Allah from the fire of the hell and we seek guidance from Allah subhanho wa Taala alone. barakallahu li come to all of you who have attended the session, let me quickly check with each one of you. If you can all hear me because I'm getting a lot of responses here. Some are able to hear some are not able to hear me. Could you quickly confirm to me in the chat box if you're able to hear me clearly. Okay. All right. Perfect, beautiful. Okay. So let us begin the session without further ado, because we have an interesting session lined up. The session has been
entitled Islam money and you and I began by reading what is called the hook bottle hajer This is often the sermon that whenever the Prophet alayhi salaatu wa Salaam would begin a sermon he would read the battle harder, and in which there is a reminder for us where Allah subhanho wa Taala is talking to the believers and asking the believers to keep the duty to Allah subhanho wa Taala and fear him and speak always the truth. And this is one of the efforts that we are trying to take in today's webinar, that we fear Allah and we speak the truth when it comes to matters pertaining to financial affairs. We are not here to please anybody except please Almighty, Allah subhanho wa
Taala. And every group of people have their right to present their views to present the opinion. And what we are doing today is we are Academy Kelly presenting our opinion. And as we begin the session, therefore, I want to quickly let you know why are we studying this topic as we can move to the second slide and Sharla we are studying this topic because finance affects us in our daily lives. It is something which affects in our daily lives, we are working to earn money. And many of you who might be attending this session from India would know that recently in the last couple of weeks, the Government of India made
an announcement by which many people have got affected. While some have praised the decision, we're not going to get into the politics of it. But the fact is that money can affect our daily lives. And therefore we need to understand and study about what is the concept of money in Islam? How does Islam see money? Is it a religion, which a certain group of school of thought would say that Islam is not at all about anything to do with materialistic things, you leave your money, you leave everything you leave everything aside, and just focus on pleasing Allah subhanho wa Taala, which means you become you know, a person who has devoted his life entirely to Allah, he leaves his family
he leaves everybody behind is only engaging in the worship of Allah is that the extremely need to go to? The answer to that is no, we need to draw a balance between the religious life as well as our normal daily life, we need to get married, we need to have family we need to have children we need to earn for them, we need to look after the needs, we need to prepare them for the future, we need to prepare the next generation. We need to do all of these things. We can acquire wealth, we can acquire resources we can inherit Well, we can inherit resources, we can pass it down to the next generation, all of this is permitted at the same time. in the same breath, we say Allah subhanho wa
Taala talks to the believers to take care of their worship, to know and understand that the ultimate objective of mankind is to worship Almighty Allah subhanho wa Taala. And therefore we say that this subject is very important for us to study.
Let's understand that one of the pillars of Islam is the cat, and the cat has something to do with money. Zakat is paid in the form of money. So therefore we understand that Zakat being a pillar of Islam. By that extension, we can say how we pay zakat, how we earn that money, all of this becomes important for us in our daily life. And the most important thing is the accountability. We have read about several sayings and teachings of the Prophet alayhi salaatu wa Salaam, when he mentioned that the person will be questioned on the day of judgment on how he earned his money from West did he earn the money? What was his source? Where did he spend his money, all of these will be accountable
to Almighty God, there is nothing which will not remain accountable, and therefore we need to take care of ourselves as well. When it comes to the issue of accountability. This webinar that we are doing today is a precursor to an important webinar or a diploma session which is supposed to begin from third of December which is called money matters. Insha Allah on the third of December, we intend to begin
a diploma course which will be running on every weekend. And insha Allah the details of that will be shared with you in due course of time.
That webinar, which we will do will look at practical solutions, it will look into a lot of aspects which has to do with our day to day life. But before we arrive
on the third of December and understand solution to a practical problems, we need to firstly look at how are we earning our money? What is the objective of earning the money? What is the concept of money in Islam, and that is why we are doing this session as a precursor to the most important session which is supposed to begin from third of December. Some of the objectives of this session today is that we will understand the pros and cons of the capitalist and communist economic system understand the ethical Islam economic system, also called the Islamic economic system. What are the pillars? What is money? And how is money seen in Islam? What is the history of money, understand the
concept called the time value of money from an Islamic perspective, prohibition of interest in Islam? And what are the reasons behind it, and modern banking as it is today, and the stages in which it has developed? And lastly, of course, what is the future of money, and its Islamic perspective on the same. So without further ado, we'll begin by introducing to you the first concept, which is the concept of capitalism or capitalist economic system. So can we have the next slide, please? Yep. Let's define what capitalism is. At the outset. Capitalism is a system which is based on private key owning factors of production. Normally, factors of production is defined as
land, it's defined as labor, it is defined as capital, in some cases, is defined as entrepreneur, the man who is in charge of getting the land, labor and capital together, in order to carry out production in an organization or in a factory. So production depends on land, labor, capital, and these other factors of production. Capitalism says you can privately own land, you can privately own labor, you can privately own capital, capitalism believes in the concept of a free market form, which is characterized by an automatic self regulation, this is the definition of others. And basically, what it means is that the government does not try to set a price, but rather, the
government allows a free market system whereby the laws of demand and supply which means the demand in the market, and the supply made by the producer will set the price to a equilibrium level. And that is will be called the equilibrium price. And that's the price at which people will trade. So that is how the free market form would work. It is an automatic self regulating system motivated by the self interest of individuals, which means what is self interest of individual that's the demand, your demand is the self interest of individual and regulated by competition, which is the supply because the competitors would also try to supply the best of quality, it will try to supply adequate
amounts less the competitor can take over your market share, and so on and so forth. So that's as far as the definition of capitalist concern. Let's move on to the next part, which is the features of capitalism, we need to understand what are its characteristics, some of the characteristics of capitalism is that every person is a sole owner of the wealth that he has earned. Every person has a right to spend his wealth in whatever manner he likes, if someone wants to buy alcohol, the government will not stop him. If someone wants to buy drugs, well, drugs is prohibited. So we will not but the people if they get an ill legitimate access to the drugs, he can go ahead and use the
money and buy it.
So that is as far as using of the wealth in whatever manner you want. You can just use it no one questions if you want to just go all out and spend 500 crore $7.3 million money in a wedding, no one is going to come and question you. You can spend your money the way you like it, in whichever manner you like it in whatever quantity you want. whatever amount you want, no one questions you, in a capitalism in a capitalistic economic system. Every person, by the way, has a right to save as well. So no one tries to question you when you're saving money, or for that matter, even if you're holding up well, when we're talking about holding up a wealth, it means you save your money, you don't spend
it on the society. So, what you do is you keep on holding any amount of wealth creating resources, and you only try to use them whenever it gives you a benefit or a profit. So I keep on acquiring more and more land. I keep on acquiring more and more money, I keep on acquiring more and more gold and my only objective is that they should give me a return they should give me a benefit and a profit and this seemed to be something very normal in a capitalist economic system.
Now what are the fallout or what are the cons of such a system which we shall
Study now on the next slide, the fallout of the ideology of capitalism, when you allow a free system where anyone can acquire any amount of wealth, and we're talking about a system in which people are only spending, when they get a benefit, people will end up trying to restrict or control the money, they will try to control the resources. And this will lead to a destruction in the balance of distribution of wealth, the rich will end up getting more richer, the because they will only look for those options where they make profit, whereas the poor will end up getting poorer, because he's not getting an opportunity to get wealth in his hand and spend it on his family. So there is a
destruction in the balance of distribution of wealth. Further, the fact that the society allows you to continue saving as much amount as you want. And it does not speak on the issue of altruism, or spending on the sake for the for the society, the concept of in fact is we have it in Islam, where you do Zakat, and you do sadaqa, the charity, the society doesn't talk about it. We know now, the government of many countries has introduced a compulsory spending on what they call CSR or corporate social responsibility. But how many of them
these are organizations which are doing it, it has been reported that many companies have used the CSR activities to market their own brand. So whenever they do CSR activity, they try to look for what's in it for me, or vice versa, you know, what's in it for me, not Wi Fi. What's in it for me is why FIM w III FM. That's what I mean by it. So, coming back to the point that I was making, it is leading us to become more selfish in a society where we are only looking at spending on ourselves or that which benefits me rather than looking at the benefit of the society as well. There are times when you need to do certain actions, or spend money in a manner in which the society is benefited.
When you don't look for anything in return, we are not looking at getting something back. Further, it leads to a gradual accumulation of wealth, creating resource, what is wealth creating resource, land is a form of wealth creating resource, because when you have land, you can set a factory they can be production carried out, people will be hired, employment will happen, the employment levels will go up, so many things can happen. So these are wealth creating resources. We see that in a system like capitalism, there seems to be a gradual accumulation of wealth created resources in the hands of only a reserved class of people. And it is often seen that in such a structure 90% or
85 90% of the wealth is constricted in the hands of 5% of the people, they control nearly 85 to 90% of the wealth in the society, and the balance of the society, which is over 90% is left with just a few percentage. And that is why you see that there is a stark, distinct division between two segments of the society, which is the rich and the poor.
It leads to exploitation of the poor by the wealthy naturally, if you can make out if you have a selfish society, society, which is not spending on the poor, and it is controlling the wealth, it will end up creating more havoc on the poor. And we can see nowadays, when governments of countries try to please the rich, they try to please the ones who have the money. And when they try to do that they end up causing trouble to the poor in the society. This is called the exploitation of the poor, by the wealthy, every member of the society is looking for a zero sum game in a capitalist economy. What is a zero sum game? It's very simple. a zero sum game is your loss is my profit, my profit
depends on incurring a loss in your bank account. So if you lose 100, I gain 100 minus 100 plus 100 is zero. That's what a zero sum game is. And that's the kind of competition that exists in such economic, it's rampant, everyone is looking and causing a loss to the other in order to gain benefit. This is the form of ideology which is there. Therefore, there is no mercy in the heart of anybody. Further, we look in the next slide about some of the other fallout of this ideology.
Yeah, there's no distinction between interest and trade. You will find people in such an economy say there's nothing wrong and interest interest is as good as straight. Why do you have to come and tell us that interest is haram like the Muslims don't deal in interest? Why do you have to say interest is haram. I'm only doing a business I'm giving out money to people and helping them and in return of that help, I want to get a financial interest. So they don't do a distinction between interest and trade interest is the fabric of
Business infrastructure, how many times we find major companies taking crores and crores of money as loans. And we know that recently in India we've had these cases of many prominent banks reporting huge non performing assets in the books of account nearly eight lakh crore of Indian rupees has been reported as NPA is non performing acid, which means our money which the banks have given out to big business houses, and the big business houses conveniently said, We are bankrupt we can't pay you, you need to write it off from your books, they have not paid back the EMI is the interest which will you are the principal which trust you. Interest is the fabric for them. They work on taking money
from the banks, and who puts the money in the bank, you and me we put our money in the bank, the businessmen, they use that money for their business, they set up their business, we say that we can't pay back to you back anymore. They become billionaires, they become millionaires. But you are a person who's to stand in front of long queues to take back your money. We seek refuge in Allah from the tyranny of such business people who try to use the people of the poor people in the society, the middle class of the society to only benefit themselves. It leads to hoarding of wealth, we've already spoken about it the selfish nature, the selfish attitude of people leads to holding a
wealth, I want to control the money, I want to have all the money with me.
Spending only with the purpose of making profit, selfishness and competition leads to earning from illicit and unethical means. Such is the level of competition in the society that I need to prove myself to be better, then full on and full on company. And in order to do that, I try to take shortcut means I want to give out things which is at a lower prices, but I can't lower my price unless I hit the quality. So I lower the quality of my goods, because I want to lower the price and capture the market. In trying to do this, I take up illicit and unethical means to capture the market such as the level of competition and selfishness in such a society. So that's as far as
capitalism is concerned, I've not gone into too much of detail, you know, we can just spend one entire workshop just talking about on the features pros and cons, but we've just tried to touch on the basics, then we have the commune ism or the community's economic system, this communism is based on the ideology
that the wealth creating resources belongs to the society at large, the entire wealth belongs to the society. Now remember, communism was born because of the capitalism trying to control the rich getting richer, the poor getting poorer. So, there was some governments which felt that well, this is not the right way we the society is the one who should be the actual owners of the wealth, they should be benefited. And with that intention, communism started off, it was an economic system where the government or owns most of the factors of production and the government decides that we will allocate the factors of production, instead of people trying to have ownership and people buying
factors of production according to the means. The government says, you cannot own anything we own everything, we will allocate you as and when you need something on the basis of whatever rationing whatever methodology they want to follow, a doctrine which was initially originated by Karl Marx and then taken forward by the others. Can we have the next slide and look at some of the features of communism?
The features as you can derive from the definition, government owns most of the means of production, they determine the allocation and provision of resources, products and services. Every nation, they say that every nation was focused on self reliance, you don't have to depend on international trade, close your borders focus only on self reliance. Now, that's another extremism of communism. And we will look at some of the cons as well. it discourages international trade and investment. And due to the communist political ideology, and focusing on retaining power, most resources are diverted to industrialization and to military does depriving consumers of food and other necessary products in
some cases. So the community sport political ideology, though it was started to benefit the society, but because of the influence of the political power, retaining control of everything, they ended up diverting more resources to industrialization and military, does they deprive the consumers of the food and other necessary products, some of the fallout of this ideology as we shall look to look into in the next slide?
Can we have the next slide please? Yeah, okay. Communism, no, the previous one. Communism chooses to solve the issue of income inequalities, but it ends up using the wrong means. So we are saying at the beginning that yes, they want to
To solve the issue of income inequalities, they did not want the rich to only control the resources. So the government took the responsibility that we will allocate the resources. But what it has done is it has used the means of coercion force. And that's the wrong method. It prohibits people from owning private property, the extreme form of communism prohibits people from owning private property, people end up becoming slaves in such a society with not much ownership of assets. And in an effort to remove capitalists, it has ended up creating one single capitalist which is the communist regime itself. Look, the problem with communism was capitalism, they found that well, the
capitalists are owning everything they are, whoever has more money ends up owning all the resources, we need to counter that, but in trying to counter that, the methodology that they have used is that they have ended up controlling all the resources by themselves, which means they have become one single capitalist by themselves.
The dictators of such regime regimes are often seem to be despotic, dictatorial, authoritarian, ruthless, why? Because they control everything. And they use all forms of force in order to ensure that their ideology remains afloat and alive. So these are some of the fallout of the Communist communist ideologies. Now, because of these fallout of communism and capitalism, there are also another form of economic system which is called the mixed economic system. Many nations of the world today follow a mixed economic system where it takes the good from capitalist economic system, it picks up the good from communist economic system. And then they say that, well, we're not going to
take the cons we'll only take the goods and therefore, we have something called the mixed economic system. However, the mixed economic system is also not free from error. The reason for that is that whether it is capitalist, Communist or mixed, these three forms are all forms which have been made by human beings and human beings are prone to making mistakes and error. And we are prone to taking a U turn in our life, as the Prophet Muhammad peace and blessings be upon him said khulumani Adama haka, on every son of an Adam has a share of sin, He has a share of weaknesses, he has a share of mistakes, he has his share of errors. And therefore, when people who are prone to making mistakes
and people who are not mad assume or innocent, when they draw up laws, there are chances that tomorrow it may be proved incorrect. And therefore, we present to you now, ethical economic system, which is the Islamic economic system can can you have the next slide please?
When we talk about the Islamic economic system, we are not trying to say that we need to rebel or we need to fight but rather we are saying that we are having an academic discussion, let us academically weigh out the options of the capitalist system and the communist system. Let's take both of them together, let us still stick to mixed economic system. But in addition to that, we base it on the principles and teachings of Almighty God which is through the Quran, and the teachings of Prophet Muhammad, peace and blessings be upon him. As soon as we do that, we are trying to take the best of capitalism, we are taking the best of communism, but we are adding a lot more to that we are
not just stopping at the best of capitalism and communism. We are saying we're going to add more to it. So let us see some of the features of the Islamic economic system.
The Islamic economic system, the first feature is can we have the next slide please.
The next slide inshallah. Yeah.
Individual is granted all personal and natural rights of creating and owning wealth. So like capitalist system, an individual is granted personal and natural rights of creating and owning, well, the government is not going to come and say now, you can't take this well, because you can't own this property. You have a right to personal property, right to personal ownership, you have been granted personal and natural rights.
Most importantly, the Islamic economic system is continuously working rigorously on maintaining a balance of distribution of wealth, and it accepts the fact that you can never have a situation where you will have every money at the same level because different people put in different level of hard work and effort. So people will be rewarded on the basis of the hard work and the effort and does on the basis of hard work, effort, intellect, wisdom, some people will be more rich than the others, and therefore rigorously working to maintain a balance of distribution of wealth does not overstate
means that you will have everyone at the same level. But it means that everyone will have an equal chance and equal possibility to own wealth. It is not that others will be deprived. Your deprivation will be on the basis of your own weakness, your own inability to acquire more work, because a lot is our Zach He is the one who is willing to bless us with whatever we seek the provisions of a lot is not limited, he has a lot to give us we need to continuously seek the halaal provision from him in the right manner by putting in the right level of hard work and effort. And in sha Allah, Allah will grant us further the feature of Islamic economic system is that it imposes moral obligations to
prevent the accumulation of wealth creating resources. And we will look at that moral obligation here we're talking about the system of sadaqa and Sokka. with due respect to the other communities, none can show a candle to the Muslims when it comes to doing Zakat and giving out charity, I don't think of any other community living on the face of this earth today, which does the amount of charity that the Muslim community is doing in the world today. We're not talking about organizations, we're talking about individuals. Every individual is engaging in compulsory form of zakat. They're giving out sadaqa, we see the people who even live in the slums. And I've seen that
because in India, you have so many slums, and you have many Muslims who live below what is defined as the poverty line. And yet you will find in those society, if a beggar comes they give out a rupee to them, a five rupee coin to them, whatever little they have, they will give why because they know when they spend in the cause of Allah, Allah will give them more. So we see that there is a moral obligation imposed through the teachings of Allah that is through the Quran, and the Sunnah of the teachings of the Prophet Muhammad sallallahu alayhi wa sallam
continuously, the wealth must remain in circulation. So this ownership of wealth and resources should not be in a manner where you're depriving the usage of that in creating more opportunities for others, you just can't take the land and just sit on that and not use it productively, there must be a productive use of it, so that it creates employment, so that it creates production. And remember, when there is more production, your GDP of the country improves, the economy improves more employment opportunities, high salaries and wages are being paid, more production means more supply reduces able to meet the demand, the prices are therefore falling, that means there is not much
inflation in the market, inflation is lower, it is a win win situation so far, till you come out and point to me at the end during the question and answers, the whatever I said was rubbish. And you can counter that, if you can, I will be more than willing to listen to your argument. Further, there is a strong and as excuse me for the mistake in the spelling, strong connection between individuals benefit and the collective benefit of the society, I just can't look at on at my own benefit, I have to look at giving back something to the society under the Islamic economic system, there is no complete ownership of wealth without looking at giving back something to the society. And there is
again an imposed moral obligation to look after the benefit of the society. And that's why we see that many of the Islamic Fiqh rules, talk about looking at the benefit of the society as a whole, rather than the benefit of an individual. Many of the rulings, many people say it doesn't suit me, it may not suit you, but it benefits the society. And that's why many legal rulings are based on the maxim, that it should benefit the society as a whole, and not just look at individual benefit. It's not customized laws, basically, that is what it means it looks at the benefit of the society as a whole. And Allah knows best. Can we have the next slide, slide, please.
So when we talk about selfishness, and sympathy, we're talking about
building a parent without forcibly bringing a parity between rich and the poor. So which basically means that there should be a proper ratio. And this proper ratio should be done by not being too selfish, and neither being too sympathetic, because if you're too sympathetic, and you end up spending entire wealth for the society, you may not be able to look after your family. So you need to build in a proper balance, you have to have the golden mean, and that is why we say that there should be no forcible bringing of parity between the rich and the poor. Unlike communism, communism was trying to do that. They were trying to forcibly bring your parity between rich and the poor. And
this is what is the quality incentive trade off, which I'm not going to talk of right now. Anybody who is a student of economics will understand
Why I had mentioned this, if you're not a student of economics, you may just ignore that statement. The last feature, which I have mentioned over here is that it focuses on strong ethics, moral obligations and benefiting society as I can you, as you might have noticed that some of these points have been again and again to repeat it. One of the reasons for that is
driving the ethics, moral obligation and benefiting society as a whole, let everyone toy for the personal benefit, but in the process, not harm anyone, let everyone earn as much as as much as he wants to earn, but with the belief
that there are others who have a share in it, Murli producing the moral qualities in the people is not enough, there has to be proper action. And that is why the society and the economic system should have a system in place by which, apart from listing out the moral obligation, it works on ensuring that the moral obligations is acted upon in an organized manner, there is an organized system of collecting soccer, soccer, distribution, and so on and so forth. So that's as far as the 12 slide was concerned, were nearly 33% through with what we have to cover the pillars of Islamic economic system. So now I'm delving a little more over here because these are your foundation,
whatever I'm talking of right now is going to create your foundation for your personal life, you must as a Muslim, or as any human being, because as I said, Allah spoke to you. When I spoke about the hood battle hajah I said Allah subhanho wa Taala speaks to the mankind as well. He says, all mankind be dutiful to your Lord, who created you from a single person, anybody who's attending this session was not a Muslim. Please understand that these teachings. Though it has the usage of words like Islam, it does not mean it is only for the believers, but it is for every mankind. So come to the pillars of Islamic economic system. The first pillar that we have over here is the distinction
between lawful and unlawful earnings. People over here have no right to print money. If you give right to print money to people, then you will have a situation where you will keep on printing money as you have the need. And I don't want to get into that right now because we have a slide talking about that a little later. Further, Islam takes collective benefit of society into consideration. When we talk of lawful and unlawful learning, you have to look at how your unlawful learning can harm the society. So you need to focus on lawful earnings. does not believe in the concept of the zero sum game I've already spoken about it. And as Allah says in the Quran in surah,
Nisa, and number 29, Allah says are you believe, eat up not your property amongst yourself in vanity, but let there be amongst you traffic and trade by mutual consent. There are two important terms here. Let there be trade and mutual consent. Trade over here signifies mutual transfer of goods and services between people. When you meet each other, you can engage in trade, let that trade be there. But with mutual consent, the quality of unlock
ends up being not mutual. One of the qualities of unlawful learning is it's not mutual, there is undue pressure on the unlawful learning, there is fraud, there is deception. Whereas when Islam talks about mutual transfer of goods and services, it means there should be no undue pressure, no fraud, no deception.
And of course, we know that the Quran speaks excessively about unlawful earnings. And some of the types of unlawful earning mentioned in the Quran is and I'm just talking about the Quran. I'm not even talking about the Sunnah of the Prophet alayhi salatu was Salam. Some of the concepts which have been prohibited in Islam is earnings to bribery and usurping other people's right in Surah Al Baqarah Anima 188 for the lust subhanho wa Taala talks about misappropriation of private and public wealth, somebody who is the head of the state and he misappropriates the wealth of the private and public This is haram in Islam. Stealing has been prohibited misappropriating the orphans money has
been prohibited in the Quran in Surah Surah Al Surah Nisa number 10 This honestly shot way and shot measuring so that you give less a quantity but you charge for a higher quantity. You know, when you go to your local store, and you say I need one quintal of wheat, so he tries to show you it's one quintal but he shot measuring or short weighing is actually giving you maybe less than than one quintile charging you for one quintal but nog Rafi is prohibited as we know in Surah Surah number 19 will guarantee and commercial sex trade has been prohibited in Islam. As we know some countries have made it
Legal sex trade has become legal in some countries, whereas an Islamic economic system it says don't take earnings from these places, prohibit these form of earnings prohibit these kind of trades. People should not engage in earning money through these kinds of trade, liquor industry, it's selling its buying its transportation, everything should be prohibited gambling, through which money belonging to people is transferred to the others only on the basis of luck and chance what is gambling only on the basis of luck and chance some money is transferred from one group of people to another group of people, there is no effort, there is no proper factor of production involved here.
The only thing that is involved over here is your luck and your chance.
This is prohibited. And there are forms of devouring of interest engaging in interest, fortune telling fortune telling has been prohibited by a lot in sort of aleida number 90 the and definition of arrows and dedication of stones all have been prohibited in the Quran.
So what we've just touched upon are some of the unlawful earnings. There are many others which have been mentioned in the Quran and other authentic teachings of the Prophet peace and blessings be upon him. Now my question to those who are listening to the session is What is wrong in these things? Anyone who's listening, let's be very, very honest with it with ourselves. What do we see wrong in it? Is it wrong to prohibit bribery? Is it wrong to prohibit stealing? Is it wrong to prohibit misappropriation of orphans? Well, these are unlawful learning. It happens in society, the Islamic economic system says this is not allowed. The second point which is mentioned over here, and by the
way, before I proceed to the next point, we have a workshop coming up on the third of December, which I mentioned, money matters in shoreline that session, we shall actually talk about some of the permitted and prohibited transaction. Please go back to the previous slide. I'm still not done with the previous slide.
Okay, yeah, we have a session coming up on money matters, where we will discuss about permitted and prohibited transactions. So you should be inshallah registering for that on the third of December. It's a series of session which will begin on the third of December, where we will talk about what are the kinds of prohibited transactions, the likes of verba, the likes of
Mesa speculation, gambling, what are the forms of rebar, how it can affect us, we shall inshallah look into all of this. The second point, which is the pillar of Islamic economic system is prohibition of hoarding of wealth, you're not allowed to hold well, but rather, you have to circulate the world, the moment someone holds the wealth, circulation of wealth is stopped, equilibrium will cease to exist in the society. And we know that the Quran mentions about the greatest holder in the Quran, who was it? It was okay. The chapters room is blocked, so you don't have to unblock it will be with. The person who's mentioned in the Quran is qarun. qarun is
mentioned as the greatest holder of wealth. And this ideology of holding wealth is called caranya. In Islam, somebody who holds the wealth you call him Caronia he's just holding the wealth is not paying Zakat on it. He's not
putting it back into the society in order to create more opportunities for others also to earn money, as Allah says in the Quran in Surah Al Imran is number 180. And let not those who withhold the gifts which Allah has given to them out of His grace, think that it is good for them, those who are holding up the wealth, don't think it is good for you. Allah warns us in Surah, Allah marohn rather law says they it will be worse for them. So panela what a warning from Allah, what a clear warning to those who hold the wealth and not spend it in the society who do not put it back in the society for us, as Allah also says in Surah, tauba number 34. And there are those who buy gold and
silver and spend it not in the way of a law announcement to them a most grievous penalty. Now when we talk about spending in the way of Allah, I will define that a little later inshallah, but by spending in the way of Allah, over here, we mean, you spend it in the society, because Allah subhanaw taala commands us to do that. You spend it on your family, you spend it to meet your needs, you do charity work, these are all forms of spending in the way of Almighty Allah subhanho wa Taala. The third point which is mentioned over here on the which the pillars of Islamic economic system depend is the command to spend. And when we talk about the command to spend, it means Islam does not
believe that you be a Nygaard, you be a person who's a miser, but rather you engage in spending which is judicious in nature. You don't go to the other extreme. Okay, I've been commanded to spend. So tomorrow I'm gonna go and I'm gonna buy Gucci bags. I'm gonna buy my latest car.
You can buy all of them by the way, there is no harm in buying them. If Allah has given you the means to buy all of that and still be able to do a lot of charity, no harm in that. But if you have limited wealth, and that entire wealth, you just blow it up in buying things which are luxurious, which is not needed. That is not permitted, judiciously spend your money, give your family good food to eat, give your children best of education, you they have that right? spend on what is the right as the Prophet peace and blessings be upon him said, The when you spend on your family, that is also a form of charity, and you will get the reward of doing something and alone will reward you for
that. So don't be a miser spend, spend by spending in a cause that supports the cause of Allah, like spending in welfare activities for society, fulfill your needs, fulfill the needs of your family. Allah says in Surah Baqarah number 219 that they ask you or Muhammad Sallallahu ala Silla, what should we spend on tell them the excess beyond needs? They asked me the people used to come and ask how much do Should we do in form of charity, and how much should we spend on the society. So Allah commands the excess that means after you met your needs and the needs of your family, the extra money you should spend it in the cause of benefiting the society.
And it also means you give out carpal tunnel, there are some people who may need money to start businesses, you give them interest free loan gratitude use loan, and if they are not able to repay them, give them time, and if they're still not able to pay it, but you know, they are genuinely working on working on being successful. If you want, you can just wave of the entire loan by and earn a reward in the sight of Allah subhanho wa Taala. As Allah says, In the Quran, there are people to whom Who are your debtors who cannot repay, give them more time. But if you can wave off the loan, there's great reward in that as well. It will be treated as a charity as a senator that you
Further, Allah says in Surah Daria, I number 19, he mentioned and in their properties, there was a fight of the beggar and the room talking about
the right of the beggar the right of the poor, who do not ask us when we talk about in the room, we mean a poor person who's not asking us for money, but he's going to difficult situation, they have our right in our money. How is it that we don't spend our money on them? The command to spend means you spend on these group of people as well, the beggars, the fukase, the Miss Misaki in the room on all of these people, we need to spend the money, they all have a right in our money. So we go back and repeat that statement, which I said a while back, let every person earn as much as he can, with the belief that there are others who have a share in that money as well. The money lying in your
bank account right now as you're listening to me, my dear brothers and sisters, there are the poor people who have a right on that money. When you give them you don't do a favor to them. You're fulfilling the rights, that is theirs, you're giving them their rights. And when you give rights to others, you don't do a song on them. But that is your duty, your obligation. My dear respected brothers and sisters in Islam, we need to take an important note of this in our life, many of us would be working, many of us are student who are in the juncture of starting to work. Please make sure that you spend in the cause of Allah, you spend on those who need the wealth, because when you
spend, your wealth does not decrease. And I want to make an important point here. The capitalist economic system, the capitalist believes that when you spend, you become poor, they say you become poor by spending. So they start hoarding, whereas under Islam, we see you prosper by spending your wealth.
And when you spend in the way of Allah there will be no decrease, but rather there shall be an increase. As Allah says, In surah, Al Baqarah, number 268, to 72 to 72. Whatever you spend in good, it will be repaid to you in full and you shall not be wronged.
Look, this is the commitment of Allah. This is the commitment of Almighty God, it will not be a fail, it will always come to truth. And what is the commitment that Allah is telling us that if we spend in that which is good, it will be repaid to us in full and we shall not be wrong?
Have you ready to spend that money on the poor? Why is it that there are so many people in the society today? How many of them have we helped in the society? It is upon us to do that Allah says and sort of sort of farted, number 29 and 30 and spend in charity out of what Allah has provided for you. Do it secretly do it openly hope for a sure award which will never perish. This is a business that you are doing by spending on the poor and charity. You are engaging in a business which shall never perish says Allah subhanho wa Taala
He may pay them their wages in full and give them even more of his grease. So we have an important responsibility here. The second important point that I wish to make over here is that the capitalist also believes that hoarding of wealth becomes important because they live on the concept of interest. They say that interest is the way same as kraid. Money can earn money, and that's how they keep on holding wealth through the system of interest. Under the most Islam, we believe that the wealth decreases, if you engage in the robot interest or Usually, we will look into the definition of robot etc. In the money matters session. For now, let us understand that Allah has prohibited in
the Quran in Surah Al Baqarah, number 276. Allah will destroy interest, he will destroy rubber and will give increase for sadaqa. So whatever interest that you aren't, you bring it on the day of judgment to Allah, Allah will destroy it.
Whatever charity you did, whatever arms you pay to the poor, you bring it to a law on the Day of Judgment, Allah will give you increase in that Subhana Allah May Allah subhanaw taala help us understand the right part and take the part which is pleasing to them.
The next point, the next pillars, pillar that we mentioned is the card which should not accumulate in one place model educate. So this is the concept of the time not getting too much into the detail of the card, but just want to make an important point. Because the card itself would require a separate workshop. But what we make a conclusion on the issue of the cartels as Allah says in the Quran in Surah Tauba number 103. Take sadhaka will from the world in order to purify them and Sanctify them. And the word succow here denotes a charity of fixed amount in the form of Zakat over here. So wealth needs purification, and that purification comes in the form of support. So for us,
purification of wealth is the cup. Now once it comes out of a hand, it has to go to one of these eight groups of people. One of them is a fukada, or a poor person who can't earn enough to meet his needs. Then you have the masakan who cannot earn or find an opportunity to earn then those who are employed to look after the funds of Zakat, somebody who's managing the fund of Zakat, somebody who attracts the hearts of those to attract the hearts of those who are inclined to Islam, somebody who's inclined to Islam, and he's not getting any financial help when he's trying to do that. But if you can help him and incline his heart towards Islam, Zakat is permissible for such people to free
the captives, who are who are illegitimately and illegally made captive to free them, if there is a money which needs to be paid to free them. This this is permissible to free those who are in debt, people who are under debt and this is an important message. My respected brothers and sisters in Islam, there are so many people who are in debt, farmers who are in debt, if you pay the pay of the debt and release them from their debt. This is also permissible, also equivalent to spending in the way of Allah spending in the cause of Allah or spending on a traveler who has been cut off from everything. Now, we know that in the days of the past, people when they used to travel from one
place to the other, they will travel either by the horse or by the camel, long distances they will travel. And suppose a person has suddenly run out of his money or he has his money has been stolen, he's in an unknown place, he has no wealth. If you have some Zakat money, you can pay him that Zakat money so that he can use that money and make his arrangements to go back. So these are some of the places where the card can be spent. Zakat is another pillar on which the Islamic economic system system depends. None of these pillars can be absent if these pillars are absent even if one of the pillar is absent, there are chances that this system will fail.
Then we have the system of the law of inheritance. The law of inheritance system is that after meeting the needs of your family, your personal needs, doing the charity, doing meeting needs of the society if you still have excess wealth left with you, you distribute these wealth to your near relatives to your near ones and your distant relatives. And if there are of course no air, then that money goes to the the government the baitul mal managed by the
Muslim leader who manages it, he keeps it in the battle mall then again the battle mile money is used for the benefit of the society in the form of infrastructure and creating more opportunities for the people in the society. Now, that is as far as the laws of inheritance is concerned. Do we have any questions? Okay, we will take the questions at the end because we have Mashallah a lot of people attending the session right now. So I don't want to open up for question right now. The last pillar on which the Islamic economic system depends is to be prudent and economical. We conclude by saying
You have to spend within limits, you can't just go out in excess nor can you be too miser, you have to have a golden mean, you need to understand that I can't just go on spending on luxury, as we saw recently in India, when the head of the state of the country made an announcement that from the next day or from 12 o'clock midnight, all forms of 501,000 rupees note will become useless like paper totally destroyed. Many of the people It has been reported by some of the media, they went to the nearest mall and they bought the Gucci bags and all the big brands with the money which they had hoarded which were illegal, where they had not paid the tax. So, they were illegal money lying with
them, but they knew that tomorrow this will become useless. So let us make most of it let us go buy Gucci bags and so on and so forth. panela people can also make most of
illegal things we seek refuge in Allah and we seek that which is only permissible to Allah subhanho wa Taala We are not here to please anybody. We are not here to hold well earn enough which is an earn that much which is pleasing to Allah. It's not about the quantum of earning that makes us a better human being. It is about how we earn it and where we spend it. People talk about big business industrialist in the world and I don't want to mention any names, because it will create an create an impression about me. I don't wish to do that. I just want to make a general statement here. We talk about big businessmen and industrialists and we identify and expect them to be mortal. We
expect them to be ethical, but on what basis because they have earned so much money. We expect them to be ethical.
Psycho now though, are you with us now? Or likoma? slower? Yes. And can you hear me? Yes, I can hear you. Okay, my life. Yes, we live. Yeah. Okay, what was the last point which y'all heard me tell?
I think we were on the we were talking about the last pillar. The to be prudent and economical. Okay, so we were speaking about the pillars of Islamic economic system, I'm just quickly summing them up. There is a distinction, which is there between lawful and unlawful earnings, prohibition of holding wealth, the command is to spend giving out Zakat, laws of inheritances there is another pillar of Islamic economic system and that you need to be prudent and economical. So these are some of the pillars of the Islamic economic system.
And I hope I'm audible and clear to all of you now. So we proceed them to the next slide in sha Allah and we introduced the next concept which is the concept of money in sha Allah
Yeah, can we have the next slide please? Yeah, okay. All right. So when we talk about money we need to firstly define what money is money is defined as something which is serving as a medium of exchange
it's a medium of exchange money is what money does money is as money does what Professor Walker says which means he means to say it includes anything which performs the functions of money. Now before I proceed, I just need a couple of minutes to get a glass of water for myself. So I want you to tell me and I want you to open the chat box Can someone tell me what according to you is a function of money?
What according to you is a function of money mentioned me a function of money?
I define money to you. So if one of you could just mention to me what according to you, is a function of money. Can we have some answers here on the screen please?
Okay, I hope I'm audible now to all of you
I shall keep all of you okay money, the functions are to gain happiness trade banks, by measure of value medium of exchange, I like those answers medium of dealing store of value that's an interesting one
All right. Well, very close to what are the points which I want you to discuss. So, let us then move to the next slide and see how many of you got it right.
The next slide talks about the functions of money and the first function of money which is mentioned over there is that money is a medium of exchange we are already the next slide, which is the functions of money. As a medium of exchange, money is most important function is that it facilitate transactions. So to facilitate goods and exchange of goods and services,
and carrying out trade money is used as a medium of exchange. If I need to buy an iPhone, an iPhone cost certain dollars in the market, I need to have those dollars in my pocket to buy it. So money acts as a medium of exchange to facilitate the trade of goods and services. The second point which is mentioned over here,
Is that money serves as a unit of account. And it basically gives a common denominator when you go to a shop to buy. And suppose you are in India, and in India, if you go to a shop and say I want to buy an iPhone, one of the shop says the price of iPhone is 100,000 rupees. Another shop says the price of iPhone is 3330 grams of gold. Another shop says the price of
iPhone is 75 grams of silver. I mean this is going to confuse people, you know, there will be no common denominator. So when we talk about money being a unit of account, it basically means that we are using it as a medium of exchange as a unit of account with creating a common denominator so that everyone can identify to a common standard. So anywhere you go to buy, you'd see that it has a price in terms of rupees in India, dollars in USA GBP Sterling in UK, Durham in UAE dinar in
Riyadh in Saudi Libya used to have dinner. So these are some of the functions of money then we look at store of value, in order to be a medium of exchange money must be able to hold a value over time. In this remember, we are looking at the Islamic concept now, we're just introducing the general functions of money as you will find in any books of economics. They say that if money cannot be stored over a period of time,
it would not solve the issue of double coincidence of problem and therefore money should have a store of value.
Now, this is an interesting point because money we'll come back to this in sha Allah we just stick to the definition right now, then we have money as a standard of deferred payment in case you have made some purchases etc. and money was left to be paid. So money also acts as a standard of deferred payment, you can now block the chatbox inshallah, you can mute the chat box, we will take up the questions later in sha Allah money as a standard of deferred payment, then we have money being used as commodity now, what do I mean by money being a commodity simply it means what is a commodity, you go to the market, you can buy a commodity you can sell a commodity. So, money as a commodity means
you can buy money and you can sell money, these are some of the functions of money that is defined in a general book of economics. And in any of these capitalist or communist nations, you will find money having some of these functions. But what is the Islamic concept of money can we have the next slide please, that will talk about money in Islam.
Now money in Islam will have has no intrinsic value, but rather it only has a medium of exchange. So the purpose of money is that it should be used only as a medium of exchange, it does not have a value in and of itself. All units of money of the same denomination are totally equal to each other.
Okay, so if you have $10, and I have $10, they equal to each other. So when I exchanged $10, with $10, that's it, the transaction is over.
No one has to benefit from this transaction, I can't give you $10 and 10 take back to $1. The same denomination have to be equal to each other money has standard of value, which measures the relative different goods of services, it also has a store of value, you can store money in the form of liquid money etc. Money is not a commodity and therefore you cannot sell or rent out money to generate surplus value by itself. Very important distinction that we are making now is that in Islam money is not a commodity you cannot buy or sell money if if daanish has money, and if Muhammad needs money daanish cannot tell Muhammad I will sell my $10 to you for $12 you can take $10 but repay me back
$12 You can't say that because that will become a verb.
So, money cannot be sold or rented out with the intention of generating a surplus. Money can only generate surplus when it is mixed with other factors of production and it is engaged in a production activity. That production activity generates goods and services, which in turn is sold in the market and realizes a profit or a loss whatever the situation is. And so that money can then grow or fall based on whether it's a profit based transaction, no loss based transaction.
Money can become a
Capital only when it is combined with other factors of production. So what it means is that money when you talk about it being a factor of production, it only becomes a factor of production, only if it is mixed with other land, labor, entrepreneur forms of factors of production, in and of itself, money is not a capital, it has no value in and of itself. It only has a value when it is involved in a factor of production mixed with other factors of production, and then it is able to produce to help in the total production of goods and services. I hope these points are absolutely clear to you the most important point that money is not a commodity. The moment we understand money is not a
commodity, you can't buy and sell money. Somebody needs money, you can sell them money at a higher price. What do I mean by selling money? It simply means that somebody needs money he comes to you. He says give me $5 he said, Here's $5 When will you pay me, I'll pay you after one month, pay me back $7 You can't do that, money is not a commodity, money is used to engage in buying and selling of commodities and services, that is permissible, but in and of itself, it is not a commodity and therefore money can not generate surplus value by itself. Money lying with me cannot generate me additional surplus till I involve it with other factors of production to produce goods and services
loss. I hope this point is clear to all of you. Can we quickly move to the next few slides. I'm
more than 75% done with my presentation. I will inshallah quickly wrap it up in the next 15 to 20 minutes, and then we'll open up for question and answers. The next slide please, where we will talk about the history of money. Now we'll be quickly going through these slides or we might be changing the slides frequently. The next three slides are basically a part of something which I picked up
on the history of money. If you can see the pictures instead of trying to read you can get the slides from me each of you can email me and I can forward the slides to you. Initially bartering of goods used to take place. bartering means I give you something which I have. For example, I have a pair of jeans, I give you a pair of jeans, in exchange of a pair of jeans, I tell you please give me a bag of grain, a bag of wheat. So that's a kind of bartering where there is no money involved as such, but bartering of goods are taking place. All right. And mostly there used to be bartering of commodities, commodities like grain seeds, salt, cattle and livestock. They were treated as
the commodity money. But these were way back in the early part, right for as far as the history of mankind has been recorded, which is 1200
BC, as is mentioned over here. Then there was a period where it has been recorded that in China cowrie shells were used as commodity money. Can we move on to the next slide quickly, please.
Then we see 600 years later, the first coins were seen. And this was in Turkey present a turkey the Legion electron, probably the Legion electrum. And they were present in Turkey. These coins were made of gold and silver alloy, and it's put in a lion's head on ones on one side. Okay, so we see that from cowrie shells from bartering to cowrie shells then the coins era started coming in. From and it continued, it continued for a long period, and then we move straight away 2000
Christian era and in the 1000 Christian era, we see the introduction of paper money beginning, paper money first made its way into marketplaces some 1000 years ago during the Tang Dynasty in China, numismatics and scientists also study the history of money believe that this was the byproduct of block printing and women will know what block printing is all about. Because you have that in your you know, dresses that you make, you have the design called the block printing.
Further, we move to the next slide and we see how the development of money has taken place. Can we have the next slide please? Remember, these are just a snapshot I'm taking you through a snapshot not taking you through the entire detailing of the history. We have separate courses on this at IOU called the money and banking course anyone interested in that can take that up inshallah. Then the banking in Europe or some somewhere around the 1400 Christian era, it was seen that the modern form of banking had its birth in medieval and early Renaissance of Italy. And one of the most famous of the banks was the Medici bank founded by Giovanni Medici in 1397. So that was way back in 1400.
Christian era we don't say ad because ad normally that stands. They say this it means after the death of Jesus but we don't believe Jesus
Christ died. These trials never died. So we say Christian era. That's just an additional knowledge. Then we see now between the period of 1637 to 18 117, we see the period of the gold standard coming in Britain started pegging it in 1816. We see sorry 1637 we saw the Massachusetts Bay Colony declaring vamp on a string of clam shells used as money by the Native Americans, the Native American Indians, they used to use it as a legal tender.
And then again, in 18 116, which is about 150 or 200 years back, in fact, exactly 200 years back, Britain pegged its currency to the gold to help govern inflation. So what it did was that they said that our currency will be backed by gold, whatever we are producing or minting should be backed by a gold currency. America went on the gold standard in 1900. What it means is that they started using paper currency, but they started using backed it with the gold equivalent gold. The US US government began to print paper to finance the civil war in July 1861. The first paper notes were worth one cent five cents, 25 cents, but they were all backed by gold deposits, so there was always equivalent
gold deposits for them.
19 150 credit card is introduced by Frank McNamara, head of the Hamilton credit Corporation 2011. Google introduces Google Wallet clear exchange, we now have ATMs we have papers, we have so many other forms of system which is being used, literally your smartphone is now turning into a wallet, you can make payments from your smartphone sitting at your home, your money is in your bank account, all you do is you authorize the application to take money from your account and make the payment sitting at your home you're able to do the transaction moving in very quickly to what is called a cashless economy. However, we will look into the cashless economy a little later, I have a slide on
that as well. We move to the next slide, which is on the slide of time value of money. What I have done so far is I have introduced to you the different forms of economic system in the world. I have spoken to you about what is the ethical economic system the way it should be, and the way we need to strive and talk about it and categorically discuss about it. After that I've moved into the concept of money in Islam. I've introduced you how money is seen traditionally, and introduced the Islamic concept on it. I've also taken you through the history of money, how money has evolved, and we have not made any judgmental conclusion about any of that error. We have not tried to say what is right
and wrong so far, we've just left it open. Now I'm moving into the time value of money. This is an important point because many people who are Muslims who know that interest is prohibited, they come back and argue well interest is prohibited I understand, but can I not take back the market inflation rate? Whatever the inflation is in the market? Am I not entitled to that money? Should I not get that money back because my value of money is falling. For example, let's take this argument if I was to offer to Razia 1000. Durham's today. And if I tell Reza, I'll give you 1000 dirhams five years from now, which of the money will she prefer? She'll prefer it now, because the value of 1000
dirhams today is more than what it will be five years from now, this is because of inflation, inflation causes rise in price of commodities, what is available 4000 today will be more expensive five years from now. So I can meet my needs. Today with 1000 I may not be able to meet it five years from now, this is why they talk about the time value of money. It is quantifying the value of money through time based on time. So basically, a give him in hand today, or the rupee in hand today or $1 in hand today is worth more than $1 to be received in the future. Because the dollar in hand today can be invested to earn interest and yield more than $1 in the future. This time value of money is
now dependent on the inflation rate, the interest rate on on investment and so on and so forth. This is the concept of time value of money. Now let's look at what is the Islamic perspective on it. Can we have the next slide please? What is the Islamic perspective on it? Money is no more than a medium of exchange as we mentioned in this function, and it does not have a value in and of itself. The human effort, initiative and the risk involved in productive venture. That word by the way risk involved in a productive venture can be substituted with one word called entrepreneurial skills.
An entrepreneur takes a risk. Okay, so human effort initiative and risk can be all called in one word, the entrepreneurial skills. So coming back, the human effort initiative and risk involved are even more important than the money used to finance it. So what we're saying is that money in and of itself is not enough for you to earn, justify earning money on it. Because what is needed is that there has to be a human effort iniciative to invest the money in productive mean, and the ability to take risk when you invest in projects, when you take a project, there are chances that your money may not give you back your return immediately. You remain patient and persevering. You don't look
for a foolproof system of earning money, because the only foolproof system of running that we can see so far in the current economic is interest based system. And I will talk about how interest came into the into the system a little later. Money is a capital only when it is invested in business does money in and of itself can not earn interest. And therefore unlike capitalism, loans are not a means to generate income.
For people, I cannot give loan and hope of earning money on that fixed income interest not permitted. So we conclude that the Islamic perspective on time value of money is that it is zero. We don't believe in the concept of time value of money. If I give you $100. And if you pay me back after 100 years to my next generation $100. That's it. I my generation 10 years later, can you take 10 generations down the line cannot ask your 10 generations down the line that look our forefathers had given you at that time. 100 years back 500 years back $100. Today, the value of that is $5,000. No, that is rubber. If it is 500, it has to be $500.
Not more, not less. So that's the tvm from an Islamic perspective. Can we move to the next slide, please? Now this is going to talk Okay, the next slide is in announcing the money matters course. So kindly just make a note of this. We have the course coming up on money matters where we will talk about Russia, its implication in our daily lives, and what are the alternatives that we have for it. So join me on the third of December for that the money matters webinar. It's a series of weekend sessions starting on the third of December, it will cover the financial aspects pertaining to our daily life. So an announcement once again, be part of this session in sha Allah. Let's get back to
our discussion. The next slide please.
The prohibition of interest in Islam. Now why has interest been prohibited in Islam one of the reasons why it has been prohibited is now you will be able to connect my respective brothers and sisters, the points that I'm mentioning here from the knowledge that we have gained about the pillars of Islamic economic system. If you see the pillars of Islamic economic system, you will understand why interest is prohibited. First spiritual and moral damage, it leads to a society which is selfish, holding well, only looking for their own benefit. How can my money earn me more money without taking any risk? I don't want to look at what benefits the society my money, put it in the
bank. I want my interest. I don't care about the society. It's a selfish society. Everyone is looking for what's in it for me vfm attitude, fierce competition which is leading to unethical practice, it leads to a society which is materialistic only looking for its own benefit and what can bring advantage to them and profit to them. The suggested solution for certain spiritual and moral damages that you need to have a backup system and not an interest based system replace interest with a Zakat system, a compulsory moral obligation on people to distribute an amount of money to the poor. And we have the next point over here please. The next prohibition which is mentioned here.
Okay, the next prohibition which is mentioned over here is cultural and social damage. Not only does it create moral damage, but it leads to no extension of help to anyone in the society. So the fabric on which a society is based is of helping one another, but an interest based society looks at what is it that I benefit if I'm supposed to give out my money to neelum or I'm supposed to give it out to Matsuda or to give it out to Cambodia or Mohammed or dhanesh What will I benefit in return and looking at my own individual benefit, that is the cultural and social damage that it is causing Not only that, look at it a larger level nations are loaning out money to other nations on the basis of
interest, other nations are going bankrupt, but the tone wave of the interest component till a point reaches that the nations are not able to see eye to eye with one another. Because of these interest based loans which have been shared with with each other. We need a society which is based on
sympathy a society based on generosity and charity and altruism. And we have the next slide please.
economic damages. Well, as you can see, when you park your money in a bank and you earn interest on that, what is an economic activity which has taken place, because there is no proper production of goods and services taking place, when you leave your money in a bank, there is no more economic activity. Some people may argue, well, when I leave my money in the bank, the bank loans it out to someone else, and that person may use it for economic activity. The first point is, he may use it, he may not use it also, he may use it for his marriage reasons. And when you spend a marriage, I don't see any productivity activity happening. Many people end up wasting their money on their
marriages by spending crores and crores and millions of money. When you can just simply go to replace your your manager, do your nica, manage and start any retreats we're not here to discuss on Manage, we look back at the economic activity or the lack of it. economic developments and progress of a nation is Paul within a society totally depends on an interest when you don't have an production taking place. How will the GDP of a country improve? Let me remind you that nations in the past have prospered because of high GDP. Do you know that in India in 17 103, the GDP of the economy was contributing 25% of the world's GDP. India was ahead of even China way back in 1703. And
by the way, do you know who was the ruler of India at that time, we talk about the rich India, a person by the name of our nzme lm gear, a person who was criticized in the history books, a person who's been looked down upon by history, but it's surprising that the man was looked down upon he made India become one of the best in GDP production, highest in production ahead of China 25% of the world's GDP. Don't say India was rich, because India was rich when British took over as well, but British drain the resources but rather we had a ruler who ruled according to a system which created more opportunities. In order to know more about it and about the economic aspect of rule of our
unzip alum here you may refer to one of my lecture, which is on YouTube, you can just type our unzip alum, good bye, mon Sol daanish. And you will find a lecture in which we have analyzed about the economic impacts about the rule of our zip lm D. And may Allah Subhana Allah have mercy on his soul. Large amounts of money will remain unutilized because they are lying in your bank accounts. They are not being used in productive capacity, money is being wasted. loans are being taken by needy people generally, who comes to the bank to take loan needy people. So the rich park the money with the bank, the needy people take money from the bank, the rich take back interest, so they get richer
than poor pays back more money, so they become poorer. Clearly a class distinction is being caused due to interest in the society. Further loans are being taken by businessmen and industrialists who are eventually
turning back and saying we become bankrupt, we can't pay you anymore, please write off our loans Subhan Allah, the solution. And then we have of course, the rubber, the concept of rubber rubber will have no benefit as we have read in Surah Al Baqarah, Allah says, the rubber will be destroyed. And so the car will be benefiting you on the Day of Judgment. So we seek increase only through charity. And we have the next slide please.
On the prohibition of interest in Islam, okay, we're done with that. So we've looked into the three broad aspect on why interest has been prohibited in Islam. Now, any one of you would like to have an economic argument on that we can discuss that later. inshallah, we are almost in the conclusion and before we conclude, we talk about how the modern banking has developed over a period of time, please understand, that we mentioned about the session which is going to begin on third December, these knowledge which we are sharing here will actually help you for that session inshallah. Because all of these cannot be bypassed for that main session, which begins from third of December, because we
can only use keywords, and this background knowledge will help you connect with the information. Coming back to the modern banking stages of development. Can we have the next slide which talks about what happened in the early history of mankind will in the early history of mankind we've already seen right now, when we saw the history of money, there was no paper currency. Remember, barter was happening. Then there was a gradual,
gradual introduction of gold and silver, accumulation of wealth slowly started taking form of the gold. And now what people did was they wanted, they couldn't carry so much of gold with them. So they started depositing the gold with the goldsmith in return of the gold deposit. The Goldsmith would
Issue receipts to the people. And these deposits were given against a remuneration. So the goldsmith used to charge money to keep your gold with them, if you came, came and gave them some 10 kilos of gold, they will charge you on the basis of the space that it uses. Basically a rent, you would pay a rent for parking your money with the goldsmith. In exchange of that you would get a receipt. Now what people started doing was in their day to day trading, they realized that well, if I have to pay something to daanish, and instead of going back to the goldsmith and taking out my gold, I would tell them, hey, Dan, is you know what, I need to pay you 10 kilos of gold. Remember, we are using
gold as currency, money has not been introduced, we need to pay you 10 kilos of gold. I have money lying with the goldsmith. Here's the receipt, take this receipt, go to the ghost button collect your gold. So what happened now was slowly and steadily the society realized that well, we can just simply Park our wealth with the goldsmith take the receipt, and started using receipt as a medium of exchange. So the receipt started being used as a medium of exchange backed by gold. Remember, gold was the backup currency backup.
What did the Goldsmith's started doing? The Goldsmith saw that the people are keeping the gold, but they never coming back to us. So they wanted to figure out what's wrong. They paying me the rent, but they're not taking the gold back. What's the reason? When they went out in the society they saw that yes, these people are using my receipt and passing it to one another as a medium of exchange. So Eureka, innovation invention, the goldsmith came up with an idea. Why is this goal line with me over here unutilised no one is coming and taking it, people are happy just exchanging the receipt, they forgotten about the gold, let me give out these gold as loans to those who need it. Because
remember, gold is still a currency not adopted entirely by the society. So some people may still need gold, anyone who needs it, we will give them on interest. So you take back 10 kilos of gold, but return me back 10 and a half kilos of gold. So they started giving the deposit of gold out on interest.
Now, if you were listening to me carefully, did you notice the cheating that took place? The Goldsmith was not the owner of that gold. But the goldsmith gave out those gold on interest to others. Even though though they were not owners of it. Further, the goldsmith realized that, hey, here's a business taking place. Let me also start issuing fake receipts. And the goldsmith started issuing fake receipts that if you this receipt is worth 25 kilos of gold, anyone. And the goldsmith promises to pay the bearer of this receipt, 25 kilos of gold when presented for payment. And he introduced it in the market. So if the both of us wanted to buy something, what he did, he just went
to the market gave him a receipt issued by himself. Just give it to the market, buy whatever you want. And that person who's buying it high chances, he will never come back to you because he might give that receipt to someone else. Because we are a society in which wealth is circulating, someone is buying. So someone is selling someone is selling so someone is buying. So it is exchanging so let the receipt exchange and let me keep on issuing fake receipts. And by this I keep becoming more and more wealthy because I at the end will get all the benefits that I want.
At the same time the gold which is lying with me, I put them out on interest as well. So I get back more gold and the fake currency which I've introduced in the market in case people come back asking for the gold. I have made interest on gold so I can pay off from that interest. Subhana Allah, these are the early history. If you've been hearing me carefully, you will understand now what's happening in today's market.
Move to the second stage please. Can we have the next slide. We still not yet developed the modern banking is getting developed. And the second stage they started issuing receipts and lending out loan to the needy, the businessman all they had to do was if a king comes and ask for money, here is it I'm issuing you a receipt to the king. Take this receipt, go to the market, do your business, do your trading and I promise to pay the bearer 15 kilos of gold, they started giving up loans to the people who were needed the businessman and King and they started charging high rates of interest because they knew they had to charge high rates of interest Why? Because when you issue fake
receipts in the market, these people will may turn up and ask you for the gold what would you do? So you need that goal to be realized in from the market. How you do that by charging high interest from the market. Because remember gold is the currency which is being used.
Okay, wealth created out of fraudulence and
Jerry and slowly the goldsmith started becoming more and more powerful, you can understand clearly, when the king is coming and taking money from you, the prince is coming and taking money from you. You are becoming a powerful man in the society. People need money they are going to you.
Okay, so you are becoming an important player in the market. You are controlling the wealth of the people, you are controlling the real wealth of the people.
Okay, I beg your pardon. We are still in the early history. Okay. We were not in the second stage. We are still in the early history. Can we move to the next slide, please?
The second stage, I think that's the next slide. Yeah. Second stage.
Okay, the second stage is now when the wave of industrialization is sweeping through the West. Now, suddenly, businesses want more money, businesses need capital, there's industrialization taking place, you need money. So there were only two options which are left. One is you go to the goldsmith, who have now become moneylenders. They are no more Goldsmith. They are doing the job of a goldsmith, but they're also becoming moneylenders. So you go to these Goldsmith or moneylender and you take money from them, or you go to the middle and upper class people in the society and you tell them, please give me your gold, I want to keep this gold with me, in exchange, take this receipts
and go out in the market. And then I can give out these gold on loan because remember, from their experience, they have realized from the experience of people once upon the gold with the goldsmith, they were not coming back and taking it rather they were using the receipt and trading using the receipt itself. So they started reaching out to the middle and upper class in the society. Now, the first step led to sharing the profit or interest compulsorily with the goldsmith. So in case people would come the industrial men or the business class would come to
the goldsmith for money, the goldsmith would say, well, you want to do business, I want to be take part in your profit, or I'm going to give you money, but I want a fixed interest. So if a big businessman would come hoping for some money from the goldsmith, the goldsmith would give him in lieu of a profit, or a compulsory interest, you have to pay me so much irrespective of whether you make a profit or loss.
So what the companies were left was, let's go out to the public and take money from them. Now, this is where the goldsmith felt they had a competition. And in order to kill that competition, they told the middle and the upper class society, why are you holding on to your gold? Keep it with us? We will give you interest on that. Why are you keeping a gold in the home, come and give it with me I'm giving you a receipt, go out use the receipt. And for the goal that you keep with me, I'll pay you a small interest. They are closing the doors for these businessmen to go out and take money, the businessman will have to come to these Goldsmith or these moneylenders. And what the businessman
will do the goldsmith will do. The Goldsmith will charge a higher interest from this businessman in order to realize what he has to pay to the middle class society from whom you've taken their money. I hope you understand the complexity of these transaction.
Can we move further please? So the next slide. Further in the second stage, nearly 90% of the savings of the people slowly went into the hands of the moneylenders, can you see how the businessmen are being choked of the capital, they are not getting an opportunity to raise the money from public, it made it impossible to get capital unless they took it from the goldsmith. Now this created a situation where the businessman only have to go to the goldsmith. And remember the prohibition of interest is because the rich gets richer and the poor get poorer. So people started talking the money with the goldsmith and earning more interest. People who needed the money started
going to the goldsmith and paying higher interest. Rich became richer or became poorer Simply put, division of society was becoming more and more complete. Everyone from the poor farmers to the big industrial houses now came under the reign of these bankers, the Goldsmith's the moneylenders. They came all under the rain. Everyone who needed money would go to the goldsmith. Anyone who wanted to park extra money would go to the goldsmith. Why would I take risk and give my money to a businessman? Why when he does not promise me an interest? The Goldsmith next door is telling me come to me I'll give you a fixed rate of interest. So this is how they started attracting the people to
put their money. Don't go to the businessman. Don't put your money with him, you might incur a loss with me guaranteed return. That's how they started taking away the deposits of the people into their own kitty. Can we move to the third and the last stage
the modern banking system is launched with the goldsmith becoming the owners of the bank to top 1230
Owners of the bank in the world today are all Goldsmith's they were all moneylenders.
The Rothschilds and the Rockefellers. The history is become from the goldsmith family. They are the ones this is how they organized themselves. What happened was that they realized that well, now we're working as in isolation, we need to organize ourselves. So the moneylender, lenders organize themselves in different groups. You have the Rothschild family, the Rockefellers, they organize themselves in order to govern the financial system of the world. Few wealthy people started establishing an institution of money called money lending, called bank bank was established as a money lending unit.
They had two forms of capital, a capital which was contributed by the owners, the shareholders, which is a miniscule number, about eight to 10%, the balance 90% of the money used to be raised through deposits. My respected brothers and sisters in Islam, the money that you park with your bank, you represent that 90% but that 90% does not give you any say in the management or administration, that five to 8% that is kept by the owner, he controls the affairs entirely
Subhana Allah, this is how the modern banking stage caught develop, I've just presented the different levels to you, can we move to the next slide. So, now it is for you to draw a conclusion, whether this is just or whether it is unjust, we can talk a lot more on this in sha Allah, but that we reserve it for the cause that we have called money and banking at IO u IO u has a course on Islamic finance. Under that we have a subject called money and banking. Anyone of you intending to study more about it can join one of Islamic finance courses. inshallah.
What was the consequences of all this, the consequences was a few few influential bankers started governing and controlling billions of funds. They the bankers influence the political and economic and cultural lives of the countries, there was an increasing inequalities between the rich and the poor, early stages, moneylenders would rock people individually. But today the public started getting robbed through syndicates. Just to give you a little more brief on this, that you must you should be aware of was that the United States of America in 19 133, Roosevelt started this concept where he made it prohibitory on people to hold gold in the United States. Remember, we studied in
the history of us that in 1900, they launched the paper money backed by gold in 1933. They told people compulsorily everyone has to come and give the gold to the government, no one can keep the gold with themselves. And they gave them a duration of period if you do not submit your gold in this duration of period, then you will be tried in the court of law, it is a criminal offense equivalent to holding pornographic material or drugs in your kitty. You know, in those days, pornography was prohibited in us, and so was drugs. So they said that it would be equivalent, the sin of holding gold will be equivalent to that through this mean compulsorily gold coins, gold bullion, any form of
gold was stripped of people. And what people were told was, we will give you $20 per ounce of gold. And this is the money that was given to them based on the whatever way the measure that the gift for every ounce $20 of $20 of the paper currency was issued to them. And it was written note, In God we trust. The whole idea was that compulsorily the paper currency was introduced, forced on people.
In 19 133 or 34. When Nixon took over Nixon, there was the Bretton Woods agreement, which unilaterally was broken by us, because you us in the late 40s, I think not not 33. I'm sorry. 33 was when Roosevelt introduced it 44 or 46. It was when Nixon introduced, in fact, it was in 46, during the World War Two, where they needed more money. And they realized that they had to print more currency notes, because whatever gold had to come has already come in. How would you get more money, you can't make more money. So we need to print money. So Nixon came up with this idea that we need to break the Bretton Woods agreement by which you were maintaining a certain standard the standard
which was maintained was anyone that that dollar 35 per ounce, they had raised it from dollar 20 to dollar 35. By the way, this is interesting, isn't it? That in nine months after Roosevelt introduced this concept of compulsorily confiscating gold, he made it $20 per ounce. within a span of nine months, he devalued the currency to dollar 35 per ounce. So people immediately lost a lot of wealth
and then when mixed into co
He realized it was war time and they needed more money to finance the wars. How would they get the money because they are introduced paper currency. So they broke the Bretton Woods agreement and they said we are going to print currencies and they started printing currencies as and when they need it.
And that has been going on happening all this while people are trading natural resources in exchange of dollar which is printed.
So, panela natural resources or natural resources being traded in exchange of what dollar dollar printed paper currency, not backed by nothing, backed by a promise by the government to repeat suparna law, we know what the government's can do Subhana Allah We seek refuge in Allah. So, this is how the modern banking system has been, and how political powers join hand with the modern banking system to control the wealth and resource of the people.
What we are saying is people should be aware of it, people should understand that they should get what is right. Unfortunately, by using English words, a capitalist and, you know, reformulation positive, you know, you use power words having positive connotation, you give an impression to the minds of the people, that this is something good. But the reality is that what you're throwing it down, you're pushing them down the throat is something which is taking away the real wealth, and giving it in the hands of the few people. The real goal today is not in the hands of the Americans in the hands of the people, it has gone into the hands of these moneylenders, they control the real
wealth, the state controls the real wealth, people have got nothing, they just got paper currency, which keeps devaluing it. So in 1900, when they started backing the paper currency with gold, if you had 10 kids, one ounce of gold
and if I had one ounce of gold, and if you were in us, and us made this low of $20 per ounce, and they gave you $20 and I will say not in us I was in some other country, both of us had $1 one ounce of gold, but today you have an equivalent $20 but I still have my one ounce of gold. We went to sleep 116 years and we woke up on the 19th of November 2016 you have $20 with you and I have one ounce of gold who's richer It's me who's richer than you because I have the real wealth whereas you have been ripped off your real wealth Subhanallah so that's the consequence of all of these we move to the last slide please the cashless economy slide the future of money the future of money as can
be seen the Bitcoin is a generation which has been discussed and debated and many people are talking about it. I saw question also can a Muslim deal in Bitcoin currency? We will discuss Bitcoin and Sharla separately maybe in the you can write an email to me and we can discuss Bitcoin. I don't want to get into the economic aspects to it. cashless economy seems to be a future you are talking about virtual currency, electronic money cashless economy, countries are banning or limiting the use of cash. They say that the suggested benefits are it will limit the black market transaction, everything will become accountable and can be seen by the government suggested benefit the
government can track the income and expenses and track down where the people are paying their taxes. Some of the risks involved in this though is it is against the Sunnah of the Prophet, the son of the Prophet is used gold or silver, because that is a real wealth, no privacy and also gold and silver cannot be just produced. There is a limitation on it. So there is a natural limitation on the printing of money by God through the use of gold and silver. But when people start printing it, they can go on printing whatever they want, because it's just a piece of paper and you need to stamp it that In God We Trust Subhana Allah, no privacy as all information is accessible to the government.
You have no privacy to your information, whatever you buy, whatever you spend whatever little you spend on personal thing, everything becomes accessible to the government. Nothing is private. Information and access can be misused. Everything is getting in linked online. And we keep hearing every day my respected brothers and sisters, that your information has been hacked, or somebody hacked into the system or the system came crashing down. The servers have lost everything. What happens then, like like the US president?
Well, not the President Elect but the counter the competitor to Donald Trump, Hillary Clinton, there were issues being raised about 33,000 emails deleted. So things can get deleted. What happens if your records which are all kept in the server in a cashless economy is suddenly lost? You had 500,000 million dollars of money lying in your account, suddenly the system loses everything, everything is lost, every track is lost. What happens then?
This is a system which can lead to slavery controlling people, this system of controlling people financially.
is a system which leads to slavery. As we saw with communism communities have tried to do something similar. They wanted to control everything. Well, Allahu Allah, Allah knows best. We are all students of knowledge, we are still gaining knowledge, I'm sure, certainly tomorrow somebody can come up with better argument, we will be giving a due credence. What we've tried to do in this session session, as we conclude in the next slide, please, is that we strive to study what's happening in and around us. What are the kind of concept of money which exists around us? And what is the Islamic perspective on that, we've looked at the impact of interest in our daily lives, the
consequences of engaging in interest, which leads to moral degradation, cultural impact, economical impact, we look into some of these, we look into more of these, by the way in the next session, which will be the money matters course starting on third December. And we look seeking alternatives for prohibited financial options around us now, we will in sha Allah look for these alternatives in the next session. Okay, so in conclusion, I want to mention to you that anyone who's interested Look out for more alternatives in your personal life, whatever we've spoken on today, our theoretical aspect, backed by practical examples, in the next session onwards, we will look at the understanding
of what Riba is and what are the practical implications of engaging in rubber? And what are the kinds of transactions where we fall into Riba without realizing it. So we looked at into all of that next week, barakallahu FICO for your patient listening, I can see that we've had in excess of more than 400 people at one point was more than 500. But I think I've just had the session for very long today, but still, all of you have stayed back. So inshallah we will take questions. As we open up the session for question and answers. I just want to make an announcement.
In case, I don't have an answer to your question, which is quite a possibility, because I don't have knowledge of everything. I will request each of you to send me an email. And I'm just going to type my email first in this box. Okay, I can will I'll type it later maybe because everyone is going to start typing now. So let's take questions insha Allah first
is the student loan with interest halaal it is not halaal the moment interest is all it is not halaal Okay. So a gratuitous loan which is given to you without any interest is permissible, some of the loan which gives you a moratorium on interest, which is that you get a loan for three years when you're doing your studies, you don't pay back anything, then you take up a job fourth year and fifth year when you start settling in a job you start paying back to the bank with an interest that is also not permissible. interest based loans are not permissible loans shall not be in the form of interest.
Okay, we will try and look for questions which is based on what we've discussed today okay. Try and stick to discussion which we have had today ask questions on things which were not clear which is discussed today. Some of the questions talking about solution oriented questions are things we can take up in the moneymakers course inshallah.
Can Can Can I request you to just mute the session for the time being with too many questions have come in. So, we will quickly just take some of the questions otherwise I lose track of them
If money is not a commodity would investing in the stock market and dealing with multi level marketing and I will have only 15 minutes of question and answers okay, because we got to end the session also, if money is not a commodity would investing in stock market and dealing with multi level marketing be considered Hara as far as investing into the stock market is concerned generally, when you are buying shares in a company, you are treated as a shareholder, which is equivalent to being an owner of a company by virtue of that amount of proportion of the share that you are holding in the company. Okay. So in that sense, it seems that it is permissible because your share price
keeps going up and down on the basis of the performance of the company. So if the company does well, generally the share prices will go up. If the company is not doing very well, the share prices will come down. So you're taking part in the profit and loss of the company. So by a general rule, we can say that yes, there doesn't seem to be anything wrong so far. However, there has to be detailed study done about the company as well. So whether it's a lawful company, is it a company which is engaging in lawful transactions and lawful means of earning money? Is it a company which is not relying on loans, there are certain companies and certain countries which are entirely based on a
fabric of interest, they took a huge interest from the bank interest based loans, and now they have set up the company. So would it be therefore permissible to give money to such companies because these companies are now relying heavily
on paying off interest competence. So all of these will have to be taken into account. But I'm leaving all of those aside for the time being I'm seeing as a general rule, that doesn't seem to be anything wrong with the stock market.
Okay, so the next question is Salaam, if all the bank in my country is using interest, can I have my bank on that my salary goes into and keep our money in it. Okay. Now, the issue over here is interesting, because we do have a system of opening up current accounts where you don't get interest. But I understand that in certain countries, opening up a current account is quite difficult for individuals. Generally, current accounts are set up for business people, people who are doing business, Muslims have opened current accounts in certain countries because they don't get interest in that account.
In case, you're facing difficulty, and the only option for you therefore is left is to have a savings account. You can use that savings account because otherwise how do you draw your salary, your job is hard. It's just that the medium where they're transferring the money is into a bank account, which is an interest based account. So you keep your money there, you draw your money as as per your needs. I also understand that in some countries, now, they want you to keep your money parked with the bank, use it through making payments using online means etc, like we are seeing a form of economic
change about taking place in India. In such a situation, what should be done is
if there is any interest which is accruing into that account, then interest must be immediately taken out and paid off as charity. Okay, without expecting that, oh, Allah has been to give me great reward. I'm doing charity. No, you're doing it because you were put into a situation you are a victim of circumstances. And as a victim of circumstances, you've used the next best alternative, which was there with you. So you take out your interest and you get rid of it.
loan with interest? halala I think I've answered that as well.
Awesome speech, but the speaker was too fast. Okay. Feedback taken insha Allah I'll speak a little more slowly next time. What is the Islamic perspective on trading stock options? I think I've already answered that. What about exchange traded funds that are backed by option securities? Whose answers question, say it I would request you to post this separately to me on mail? Because I don't want to get into discussing now what futures are and options are for the people the general people I would understand would not understand what futures and options are. So say yes, you will please make sure when I make announced my email address, you make a note of it and you can put it up inshallah,
the share market trade permissible, I think I answered that, as it can be money of luck and chance, this argument is not correct, because when you're investing the money in the share market, maybe you are not actively participating in the running of the business, but somebody who's actively participating and using your money, he is investing it strategizing it, planning it using portion of money in marketing, promotion, selling distribution, so on and so forth. So, there is a proper usage of the money taking place by a halaal company. And therefore, the companies can benefit or can suffer a loss in case that this doesn't happen. So, in such a situation, you need to understand that
this cannot be put into the same definition as luck and chance. And by the way, the concept of luck and chance will also be discussed a lot more in detail in the money matters session. Okay, as I just want to repeat myself, the whole objective of this session is to create is a is a precursor to the money matters course. You need to be there for that main course insha Allah the money matters most to get an answer to most of these questions.
Okay, the duration of the course and the time commitment we need. Can we have
an update on that? The inform? When is the course coming up? It's the third of December.
The duration i think is six weeks, right?
Yeah, I think we have six sessions. We have six sessions on that inshallah third December to 13th of Jan, we're doing it every Saturday in sha Allah and we will be having a one on 30 minutes session with question and answers. And each session is linked to one another. Okay. This is part of a course which I have done in several cities, but we've done it over two days, called money matters. This time we are bringing in bringing it online. So we are doing it on weekends on every Saturday inshallah, same time. I think it's 7pm cutter time, that's the time in which we shall be doing it is insurance haraam. Again, if you just I just
just a correction that the sessions are going to take place at 7:30pm Eastern time. Okay, so
My apologies, I stand corrected, the sessions will be at 7:30pm cutoff time. So not 7pm. Okay, coming back to the question on insurance being haram or not, as far as insurance is concerned, if you're talking about what is the conventional commercial insurance, which you see in and around you, they seem to be while there may be elements of rebar in it, which makes it Haram, there is a huge element of doubt in these transaction that is a horror in these transactions. And it is because of the large presence of clutter that scholars have prohibited dealing in commercial insurance contract. And therefore we say commercial insurances. Hello. Now, that's the general ruling, when
does it become permissible, it becomes permissible when you have the concepts like the car full, which is there, which is mostly an option where people see the intention matters, the commercial insurance, and I have been an ex banker, myself, and I have sold insurance. And I have been trained by insurance companies, they used to come and tell me, when you go to a CEO of a company to sell them an insurance plan, invariably, you will find on the desk of a CEO, a family photograph invariably. So what you do is talk to him about the aesthetics of the room. Tell him the room is nice. And then tell him Sir, it's just a picture of a family naturally in say, yes. So So you've got
a beautiful daughter?
Can I have a look at the picture, pick up the picture.
These have been taught by the way, I'm not making up stories here. We were taught this, pick up the picture, and then just place your hand on the picture of the CEO, the person we're talking to, and then and stuff. How does the picture look now? So you basically cover him? And tell him that you know, in your image in the picture, only your wife remains and your child remains? How does this picture? Look? It looks empty without you sir, do you think they will be smiling anymore? SubhanAllah. You know, I feel like laughing now. But these these are things that were taught.
What are they trying to do? They're trying to sell insurance on selfish interests of people. What will happen to your family who will look after them. That is the intention behind it. Whereas the Islamic concept of takaful focuses on helping one another in the society, I take up insurance, because I'm worried what will happen to Salim who's doing business and what will happen to say it and what will happen to it and what will happen to Fatih and so on and so forth, what will happen to them, what will happen to him, he's doing business, so I'm bothered about the society. So we all talking in money to help one another that my brother in Islam assist in Islam, we need to help one
another. That is the objective. So the intention not as a matter of metal photography alone and the rates, the prophet alayhi salaatu wa Salaam, said, Every action is based upon intention, you're taking in insurance, on the intention of benefiting the society. So that's the first concept. The second point is, I cannot then argue, very important point, I cannot argue that I'll take a commercial insurance which is haram, with the intention of helping the society. That doesn't happen because your nominees are not the society a nominee is your family, and B, it has huge elements of her in the transaction. If so, and so happens, the amount which will be paid will be XML. If this
doesn't happen, and philon happens, then the amount will be so much, there is no clarity on what will be the payout and such plans for the insurance plans are not done with the intention of gaining money. But it is done with the intention of benefiting the society who may suffer a loss in case they don't suffer a loss, that money is set aside. Maybe in the future somebody may incur a loss, that money needs to be set aside this cannot be any profit intention.
All of these have to be taken into account. Of course now you have more and more complicated transactions being brought in, even in Islamic finance with sometimes confused the best of us.
And we start wondering that how is it that this has become a lot, but we need to keep our concepts very clear. General commercial insurance is prohibited. Another issue with regards to car insurance, if you are owning a car, compulsorily, the government wants you to take an insurance, otherwise they don't give you the permission to ride the car. In such a case, you can take up the insurance, the sin is upon the ones who have forcing you to take up the insurance, you do not take up the insurance out of choice. And normally when I renew my insurance for my car, I try to take the least you know the least options which I have to stick to keep the insurance alive. You know they give you options
bumper to bumper and so on and so forth. So I take on the ones which are compulsory anything which is add on an extra I don't take on it because I don't want to pay any additional amount to an insurance
company, I'm happy being from my own pocket in case something goes wrong.
Can we invest money in lands just as a deposit? If sorry, you mean Can I invest in money in land as a form of an investment? Yes, there is nothing wrong in investing your money in the land as investment as long as you're paying the necessaries apart, which is due on such a money, because remember, the money will keep growing. So as in when every year you pay off the Zakat on that money on that land, whatever the valuation has gone up to, you pay out the Zakat on that as long as you're purifying your wealth, there is no harm. So if you are doing that, also you are taking out money from that land. From that investment that you've made, you're taking out a liquid portion and you're
distributing it amongst the poor so you are allowing the circulation of wealth to take places well, and Allah knows best.
Okay, then we have the question where the currency trading is along. Now.
The question by shakin is about currency trading. The currency trading issue will again inshallah be discussed in the next session because we'll be introducing a specific Hadith, which focuses mostly on currency trading, which is the hobbies and gold for gold, silver for silver, wheat for wheat, barley for barley, barley, were we talking about exchanging the same medium of currencies with one another, or different mediums of currency? And also currency trading has lots of division so inshallah we can take this up next week? Okay.
I Hassan your question has already been answered about student loan with interest being halala. Haram, I mentioned that it is not permissible. What is the Islamic stance on insurance has been answered since you said money to bunny transaction?
Not halaal. So what about USD to INR transaction? Okay.
I don't know when I said money to money transaction is not allowed. I understand what you mean by that.
If you what I'm okay, I understand where you're coming from I said that you can't park your money with a bank and expect to earn money on it without allowing the money to engage in productive
Okay, that's the pillar.
The issue of exchanging USD to INR is a specific Hadith where the Prophet alayhi salatu was Salam forbade us to exchange gold for gold, silver for silver before we Bali for Bali, salt for salt dates for dates, if they are
in an equal weight, and if they are not happening on the spot.
So, for us to engage in exchange, they should be either like for like, that means 10 kilos of Gold Exchange with 10 kilos of gold
or if they are unlike, which means like USD and INR two different forms, then they must take place on the spot on the spot exchange and normally USD and INR when is when it is being exchanged.
The valuations are naturally going to be different because the equivalent of one USD in Indian rupee is approximately 68 rupees. So you can't say that well, the denomination is one USD, so I need one rupee denomination. Therefore, that is not the case. there you're using two different mediums of currencies and two different countries. But inshallah we want to discuss this more in details when we will talk about the two broad forms of Riba. One of them is the kind of questions that is coming up from you.
Can I have money kept in a bank? No, we have answered that insurance books are the haraam, you'll have to explain me what you mean by insurance books.
Okay, I have not understood about insurance. But now, we are already done with. Do we have more time to take more questions? I think we're already done with two hours of session. So can we take up the questions through email if that is okay with all of you?
Yeah, okay, perfect. So I would request all of you to just quickly make a note of my email address, my email address where you can reach out to me
Oh, so many questions. Please, I'm extremely apologetic. Mashallah, you all of you have done up in big numbers and stayed back and listen to the entire session, but I will just share my email address and I would sincerely request each one of you to just make sure you drop in a question right away. Okay, I'm gonna get back to each of you. On first come first serve basis. I'm just typing my email address. So I just request each one of you to just stop typing for the time being. Don't use the chat box now.
Let me just input my email address.
As soon as you have my email address, you make a note of that inshallah. That's my email address. Please make a note of it. I welcome questions on my email.
And that's my website. You can even go to the website contact us option is there, you can send your question using that as well.
Please send me an email with your questions. You have a lot of questions. But
I will need to conclude the session for today.
barakallahu li comm for attending in big numbers once again, my sincere apologies that I'm not being able to continue the session further.
Look forward to your participation and I look forward to all the questions to come in and any one of you who is interested in the slides can please write into me as well. Just mentioned the subject that you want the slide and inshallah I will reply back with the slides as well.
I hand it over now to the master of conduct. And she'll take it forward back Hello,
Jessica hi ready for
this amazing session. With this we come to an end for this session. please do join us on 26th of November where brother for hardware take us on a journey to understand sutra theme. This webinar will help us realize the high status that Allah has given us but how we indulge in all that Allah has forbidden and bring ourselves to the lowest of levels. Till we meet again, a cinema Holly coup de la he woke up