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MoneyMatters – All About Riba
Channel: Mansoor Danish
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Episode Transcript ©
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Bismillah Alhamdulillah wa salatu salam ala rasulillah Assalamu alaykum warahmatullahi wabarakatuhu. Everyone in general to Allah today, we have this amazing session for you all. Just look here, brother Massoud for being here with us
for the monsoon daanish is an independent Islamic financial consultant with over 14 years of working experience. He is an ex banker who worked close to six years, with HSBC Bank India, and two years with a Mumbai based Sharia broking firm in investments. Now, monsoon brother completed his postgraduate studies in finance before setting up his independent venture. as a freelancer he provides services on wills and inheritance, financial planning, investment advisory etc.
He is also actively associated with educational institutions and provides Consultancy Services to them since 2014. But the daanish has been associated with international Open University, which most of you know formerly called Islamic online university. He is the acting head of department BBA program and lecturer in the Islamic banking and economics department there.
Brother daanish is also a trained public speaker hamdulillah burgerfi and innovator and conducts workshops on public speaking and other self help related topics. We are honored to have him with us today in Chateau de Anna,
he insha Allah Allah initially will begin with a presentation
with basic information about arriba about interest, and then we have a list of questions from students that we have already received. That we will ask him and show the ad.
We will ask you to make sure that you listen to his presentation first. A lot of the questions will be answered in that and after we tell him about the questions that we have received. Then inshallah Allah you will realize that many of the confusions that you have already will be answered in the questions we have already from you.
I asked for them and so to take over and dissolve the hair for taking the time to deal with this very crucial topic, address a lot of the confusions we have and whether Masood, please feel free to
explain to the students from the very beginning the gist of the topic and then go into the other areas specific areas concerning the river and we will make sure that we restrict ourselves to this topic in this session so that we can cover all the questions within time. Does that happen a lot here but please take over
our Walkman or him in the handle in the
middle, when it will be let him in your audio and put in a woman cftr Marlena miyetti Hillel Palermo de Luna Romania Allah hi Deanna, worship Allah Allah Allah Allah.
Allah, Masha Donna Mohammed Abdullah Rasulullah Nava playing apparel Hades eatable LA or fatal howdy howdy Muhammad sallallahu alayhi wa sallam was Chavo Morimoto refer to her as in beta. Hola mundo kyndall Allah, Allah, Allah Allah now, I welcome all of you as salaam alaikum warahmatullahi wabarakatuh.
Now the course is or the session is entitled money matters. What we're going to be discussing however in today's session would be the brief background about what Weber is all about. We will try and understand the definition of rubber. And when we try and do that we will try and see in which dip in what are the different kinds of transactions that we find rubber involved. And when we do that, you will see the most of a question we'll start getting answer.
So inshallah Allah before we do that, let us just understand briefly, what does Allah subhanho wa Taala tell us in the Quran as far as following his commands are concerned, look, this subject is extremely interesting, as well as a sensitive topic. I say sensitive because many of us know the ruling on rubber. However,
there are a lot of people who are not willing to
Except the prohibition or seek alternatives. So you'll always find people coming out and telling you look, Islamic bank is nothing but it's another form of everybody's banking institution. Look the kind of Riba which used to be there at the time of the Prophet alayhi salaatu wa salam used to be what is called usury.
If you've read the merchant awareness by William Shakespeare, he talks about usury. You know, Shylock used to charge usury. So some of our
brothers, well intentioned brother, I will not, you know, doubt the intentions, but in trying to come up with their own HDR on the subject of whatever they try to say that look, what the banks are charging is not usually they are charging a small profit, it's a small interest. What Islam prohibits is usually, so you find all of these things going around. And especially if you are coming from a country where you don't have a proper Islamic banking setup, it becomes even more difficult. So it's important then we go back to the text, what does Allah subhanho wa Taala tell us in the Quran, he tells us in Surah, warrior number 56, that he has not created us except to worship Him.
And when I talk about worshiping Allah subhanho wa Taala. What does worshipping Him mean? It means complete submission. You cannot worship Allah subhanho wa Taala until you have completely submitted yourself.
That is what the basic meaning of obedience to Allah is. You cannot worship Allah without submitting to him, I cannot say I am submitting my will to God and still be disobedient to him. I may have shortcomings. But that's a different thing. But to be arrogant and disregard a certain ruling is going against this basic teaching, which we find in the 51st chapter of the Quran, where Allah is saying that we did not create the jinn and the mankind except that they worship us. So when this point becomes very clear to us, we go further in the Quran and Allah subhanaw taala speaks to the believers. And he says to the believers, that once Allah and His messenger Muhammad sallallahu
alayhi wa sallam has decreed the matter, then we don't have our own opinion in that regard. Once something has been made clear to us in the Sharia, and when we talk of Sharia, we're talking about two primary sources here, the Quran, and the Sunnah of the Prophet alayhi salaatu wa Salaam, if things have been made clear to us, if we have made Allah and His Messenger sallallahu alayhi wa sallam, as a criterion to judge what has to be done and what is not to be done. If these things have been made clear unto us, when we don't have our will, we don't have our own choice, we can speculate, we may try to get into some academic discussions. But if Allah has made something wrong,
tell us the chapters over there is no further discussion.
And we find as far as rebar is concerned, there are very clear verses prohibiting dealing in rebar. And we know Allah says in Surah Al Baqarah Ayah number 275, let's see has permitted for us to engage in trade, but he has forbidden for us to deal in Russia. Now this is an interesting idea of the four and
you see what used to happen in the past. And it happens today as well. When people try to argue that look, the conventional bank does not deal in interest. It's providing service, and it's charging for that. For people who go and work in a bank. They say, look, we don't deal with interest. We go and work in a bank, we provide service to the bank and in return we have paid for it. What is the lesson Pamela Donna says he says we have permitted trade, but we have to bid in Riba. Now from this ayah there are two things which become very clear and these are the two general principles that we can stablish just from this ayah The first principle that can be established is with regards to trade.
Allah says we permitted trade. So one of the principles that can be established clearly from this ayah of the Quran is that as far as sales is concerned, as as far as training is concerned, as far as business is concerned, everything is permissible, except that which has been explicitly prohibited or specifically prohibited. becomes very clear with this
information from the second part of the ayah where Allah says, We permitted retreat, but forbidden Riba, it becomes clear that everything is forbidden.
As far as revised concerned,
where you find some kind of knee they given. Now we're going to stop here. Okay? Because this is going to confuse Some of us are we trying to say that there's some kind of a levy some kind of relaxation given as far as rabbis concern? I'm going to ask a question and I would like to be able to respond in the chat box preferably that is going to ensure that we are able to conduct the session you know, without any commotion Can one of you just tell me according to your understanding, either of the language Arabic or your basic understanding of the word river? What do you think of ribbon means what does the ribbon me? Can someone just type in the chat box and tell me what does
and I just wait for the response to come in
Okay, some people are saying it means excess interest
more increase, alright.
Additional Okay, Mashallah Marshall, you know, that makes my task easy, Mashallah, with most of you have got a understanding of robot anything that is given to a small without any effort so that now we're getting into the more technical aspects of the definition barakallahu pekan political logic. Let's proceed, let's proceed, let me just give you the understanding of robots. Now, when I said that, the general rule is everything is prohibited in verba except where there is some exception given, I want us to now look into the definition of the word robot, as it has been rightly pointed out, the different definitions of robot include to swell
to increase any kind of revenue in addition, a profit again, interest, simple interest, compound interest. So from the definition of Riba, the general definition of Riba it can be said
that what is prohibited is interest and what is an exception could be a gain or a profit. But when we of course, look at the technical definition, the definition which is used in matters of transactions and financial transactions, then when we say Riba we are meaning only one thing and that is interest.
I hope this is clear to all of you, that when we are talking of Riba, the word of river could mean many things in the lines of addition, increase gain profit, interest, simple interest, compound interest, it can have a variety of definition, which means to grow to swell to increase and addition.
However, the technical definition which we use for rebar is and the context in which it is used in the Koran, it means just one and that is the rebar, which involves interest, the rebar which involves simple interest or compound interest. We stop here for a while, are we when we talk of interest? What about usury? Does Islam permit interest prohibit usually or likewise? No, the answer is the Hadees, which is quoted by a man God alone Whoa, that the Prophet alayhi salatu was Salam said that they even if you exchange one, their hand extra it is Rama.
The Prophet alayhi salaatu wa Salaam did not define Riba to mean a certain percentage. And he could have easily done that.
The rulings on zaca clearly states 2.5%. for agricultural produce, it's different. For general it is 2.5% he gave them a softer gold, he gave them a stop of silver, the numbers were given quantifications were done. He could have quantified forever, he could have clearly said that look, up to this percentage for bison allowed, he could have given that in the form of the nisab of gold. But the prophet SAW Selim didn't do that, he outrightly said all form of rubber is prohibited. I hope this is clear to all of you look in English, we may say that usually is different, interest is different. We can say that usually is excessively charged interest. And interest is something which
is at the bare minimum. But according to my understanding in this field of finance, I tell you, this is relative. This is completely relative. Look a person who's extremely poor
And he has no source of sustaining, he has no money, and you give him 100,000 rupees, and you tell him that I'm going to charge you 5% on that, for him that 5% is a lot of money.
But if you give it to a person who is a rich businessman, he wants to grow his business, and you tell him, I'm gonna charge you 5% well in 5% is not a big amount. So how do we differentiate between usury and interest? It's relative.
So from the Islamic concept of river, we say that the definition of usually an interest may be different in English, but for our purpose of understanding they all fall under a bar. I hope this is clear to all of you.
Now, we move on. And an important point over here as far as the provision of robust concern and shift police slammed in the face says that the kind of prohibition that has been given with regards to Riba it is not found anywhere else in the Quran for any other,
you know, product, or services, etc. We know there is a prohibition on alcohol, there's a prohibition on eating pork, there's prohibition on eating dead meat, there's prohibition on re on gambling, on eating the blood, flesh of soil, and so on and so forth. There's so many prohibitions that we can find and let us down, but the way rebar has been dealt in the Quran, it is dealt in the most purest of terms, Allah Subhana Allah, Allah says in Surah, Al Baqarah, number 278, to 79, that if we don't give up our warns of river, if we don't stop engaging in the river, it means don't stop dealing in rubber, then prepare yourself. Prepare yourself for what? A war against Allah and His
Rasulullah sallallahu penninsula. Can you imagine? On the day of judgment, Allah subhanho wa Taala throws a sword in your hand. And he says, Come on, wage a battle against me wage battle against my messenger sallallahu alayhi Salaam Subhana. Allah waging a war against Allah and His Messenger sallallahu. I mean, he was so love is the most severest prohibition that we can come across in the entire world. And we don't find this kind of a prohibition for anything else.
As far as the believers are concerned, remember, we talked about the believers because of course, the biggest sin that one can do is ship. But the more or two is to associate partners and to Allah or not to worship a lot. But we're talking about believers who believe in the love who don't go ship, but they engage in the river. So for them, there is a severe warning, and we need to take heed. We also find similar prohibition in the hands of the Prophet alayhi salaatu wa, salaam very famous hunting is where the Prophet alayhi salaatu wa Salaam. So when the angels had come and taken him, he said, I came across a river of blood. And I saw a man who was in the middle of the river of
the blood. And there was another man who's standing in the banks of the river. As this man in the middle of the river is trying to swim and come to the show to the bank. This person standing in the corner, he has stones in his hand, and he keeps throwing stones back at that person, and it goes into his mouth and this person keeps getting pushed back into the middle of the river of blood. The Prophet alayhi salaatu wa Salaam said that that man who was in the middle of the river of the blood, he was a person who was the Devourer of interest. He was the one who used to engage in interest alone, Mr. Ahn, we seek helping a lot with Allah subhanho wa Taala. And we seek refuge in Allah
subhanho wa Taala, from the sins of roba, from engaging in these kinds of transactions, what a strict prohibition. And the Prophet alayhi salaatu wa Salaam has pointed out that there are five categories of people who will share the sin with one another. In the same level, there is no difference in the sharing of sin. It's not that one has most thing over the other Who are they? The first is the person who gives rubber. The second who is the person who takes rubber. The third is He Who documents the rubber. And the fourth, and the fifth are the two witnesses to the transaction.
pay heed to this heydays of the Prophet alayhi salatu was Salam. There are five who will share the sin of engaging in Riba like for life equal for equal same in degree. Who are they, the giver of Riba? The one who takes the loan, the one who documents it, and the two who are witness to the transaction.
What a strict prohibition.
Now, when all of this is clear to us,
We, I think are in a better position now to move a little more in depth about the subject of robot and understand what does Rabbani at the time of the Prophet alayhi salaatu wa Salaam what was Jeff's idea? Which was at the time of the Prophet alayhi salaatu wa Sunnah and then we can try and deduce what are the kinds of rubber which we find in today's transaction.
Firstly, as I told you, that river by definition could mean any excess in quantity addition increase, many of you have given me different words to grow to inflate, to expand to increase
anything above the original size, okay, so it can also mean swelling, alright, the swelling is also got its root word in Florida. Technically, when we talk about the word rubber, and this has been explained by Aberdeen, he says, any increment without justification of an equivalent counter value that will fall under verba.
A similar definition has been given by another scholar in a ultra journey, he says in his book ultra refers to any increment from the exchange, which is conditioned upon one of the contracting parties. Okay. Some of you who are complaining that the voice is cracking, I'll just check once more. Is it okay, now?
I've been dystrophy and the others who have been complaining about the voice. Is it okay now?
Okay, the voice is low. Let me try and increase the volume just a second hold on?
Well, I think the volume is full right now. So I don't think I can increase it further. So we just try to proceed with the session Sharma.
Okay, it's fine now, all right, hamdulillah. So,
the technical definition as I was explaining to you and this is an important definition given by ultra Gianni he says that rebar is any increment
from an exchange, which is conditioned upon one of the contracting parties, you put a condition, there is an exchange taking place of financial transactions taking place, there's an exchange taking place. And there is a condition which is being put upon the other person, that if you fail to pay
the amount which is due, then you will have to pay an additional amount.
You see the time of the Prophet alayhi salaatu wa Salaam, what would happen is people would buy goods, or borrow money. And they would be given a specified time, you know, you need to pay within a year, a year would be given, and they had to pay back the principal. But after a year,
when the person could not pay, he would come
to the creditor and say that, look, I'm not in a position to pay you the money. I need additional time, give me three more months, or give me another one another year. So what the creditor would do is he would give me additional time, but that time would come at a cost. And that would be the robot that was very commonly found during the days of chameleon. It's also called the robot engineer, because this was the practice which was there prevailing at the time of the Prophet.
So I hope this is briefly clear to you what was happening at the time of the Prophet alayhi salatu was Salam we're gonna now break down this definition of Riba because we have other studies of the Prophet alayhi salaatu wa Salaam, where he has given some explanation of what Riba is, and we're gonna come to that, but before we do that, let's look into the types of rubber based on
the explanation which I just gave you a verbal idea, as well as the definition which was given earlier by in Aberdeen and also john,
we spoke of an exchange taking place and we spoke of earlier linear where there was a factor of time involved. So, we have exchange and we have time, these are two important principles from which the depth is the types of Reebok and we clearly understood, once we understand the broad print types of rubber, we are in a better position to understand about the transactions around us. The first type of rubber comes is called rubber or nasiha or it comes from the root word of anessa which means it has to do with time, time is a factor. The other is called rubber Alfa model, which comes from the quantity factor they exchange with one another commodity when you're exchanging two commodity so we
have a quantity factor and we have a
time factor. Let us look at both of these categories of rubber. I want to make it clear here. I don't want you to be able to memorize all of these. If you're taking notes, it's good for you. Even if you're not taking notes, just try and understand briefly what is what are we discussing? It's a short session. All right, I will give you a detailed link of another course which I have done on this subject matters. By the end of my presentation, you can take that course later. For now just focus on understanding what is happening. What are the broad types of variables if we have five we find around us coming to Aruba Nasir, it is a deferment in possession of two commodities over a
certain period of time. So we're talking about the time factor and when we talk about rebel further, we are talking about an addition in exchange of commodities. So, you are exchanging two commodities with one another and there is an addition to one of the commodities. So this is what the two categories of Riba is river nasiha. And other we will look into this a little more in detail. Now. We'll try and understand in the light of the very famous Hadith of the Prophet alayhi salatu was Salam.
Forever on the basis of this definition of quantity, and time factor can be further broken down into a Riba which involves sales and a Riba which involves loan transaction remember, we spoke of rebar jeconiah, that is a river of loan,
which involves money being charged additionally, because you're not able to pay at a certain period of time. So the time factor comes in and this is also called Riba, do you which is the loan transaction? And under rebel, do you you have further two subcategories wimba alkire and Riba heylia what is Reba alkire I'll just quickly give take you through the definition, any increment in borrowing or lending money, whether it is in the form of cash money, or in the form of gaming,
this is extremely important. Any increment, whether it is in the form of money, or in the form of kind of, I borrow some money from you, I borrow some money from a dog man. And in exchange of that, I have to return him back his principal, but because, you know, I wish to express my gratitude, I give him something in addition to that, this can also fall on the robot
or he can see I'm Batman can see this brother, I'm giving you my money, no problem, you take six months time, give me back my principal. And as a token of appreciation, you know, I like that pen which you use, I want that pen of yours, maybe the pen is not very expensive, it's a pen which you can also buy from the market, but just as a token of appreciation, you know, he wants to he wants the pen which I use that becomes rebar as well.
Because the honey because the understanding of demand curve is very clear. Any exchange which is taking place any loan which is being taken lending or borrowing which leads to an increment, either in the form of cash or kind. And the general principle with regards to Riba l curve is any loan which brings any kind of benefit, it is rubber,
any load, which brings any kind of benefit. Now, when we talk of benefits, here, we're talking about the credit of benefiting by giving money, I've given you money as low. And I'm benefiting from that. This is clearly a case of Riba. And this is rebel. Rebel Germany, as I explained to you a while back, that people used to come to the come at the time of the Prophet alayhi salatu salam, this was very common in the days of jack Leah, they used to say, uncertainly, as different, give me some more time, and I'll pay you more. It's what it was very common transaction, people could not pay on the due date, they would seek more time, and they would pay more. This was the practice during the days
of George Eliot. So in the category of loan we have two different kinds of from rubber one is the kind of rubber which used to be injured here, where for the sake of additional time, people would charge additional amount of money. This happens today, you go to the bank, you take some loan, and you tell the bank, I'm going to pay this back to you in three years. So for three years, they will charge you a different amount. They'll say, Well, fine, you take 100,000 rupees, but you pay me back 120,000 rupees. Are you paying me back 5% interest compounded per annum
Riba clearly a case of rubber the other category of robot could happen on a price
Besides, you know, on a one to one basis, it could happen in any kind of transaction. It could be on a personal level. It could be you go with your local grocer where you go and buy some stuff from him and you don't pay him on the due date. And then after that, the guru says, no problem, you can take some more time and, you know, give me some additional cash or he says, You know, I like the pain of yours. Just as a token of appreciation, even though it's just a token of appreciation. We follow the general principle, any loan that brings about benefit will fall under the category of rubber.
Okay, I hope this is absolutely clear to all of you in sha Allah tala. Now we're moving on to the second category of Riba, which is the herba in trade or Riba in sales transaction or Riba. ogbu
This occurs when there's trading taking place, there is exchange taking place, there's an exchange of commodities taking place, it could be same commodities. And we have the very famous Hadees of about a summit of the Allahu anhu who said, I heard the Prophet alayhi salaatu wa sallam say, gold for gold, silver, silver, wheat for wheat, barley for barley, dates for the salt for salt, six commodities, gold, with gold, silver, wheat, barley, dates, salt, and the Prophet alayhi salaatu wa Salaam is saying
if you exchange
each of them with one another gold you exchange with gold with you exchange with wheat, barley, you exchange with barley, Dave to exchange with date, salt, you exchange with salt
dates, you exchange the dates all of these six commodities if you exchange them, you need to follow two conditions. The prophet SAW Selim gave two conditions Okay, people are complaining that there's a lot of distortion.
Sister Ayesha, is it clear to you How about the others can you just confirm to me
as a he it's perfectly fine my sight I would advise everyone to wear earphones and that will help you to hear better in general than it does I can look at
Okay, moving on. So, coming back to the Hadith and I just repeated quickly, gold for gold, silver for silver wheat or wheat barley for body dates for dates, sex or for saw these are also called the Rebbe v commodities because they had these is
the Prophet alayhi salaatu wa Salaam. So, if you you are exchanging these commodities follow two important principle. What are they?
The first, if you're exchanging gold with gold, the principle is it must be like a law it should be equal for equal.
So if I have gold
100 grams, and if I want to exchange with
let's say Abdul Rahman
I can exchange it with him. The condition the prophets of Salaam said is I give hundreds I take back 100 no problems. The first condition is like for like equal for equal if they are like for like golden gold. They are like for like the first condition is equal for equal. The second condition the profit cells and then said is that it should be on the spot.
Okay, I'm smiling, because many of you will start wondering, why is it because I'll give 100 grams of gold to Abdullah and tell them to Rahman according to the police, you need to now pay me back 100 grand on the spot. Right? That's what the Hardy says.
The principal says on this holidays, that if it's golden gold, the condition is equal for equal. If I give you 10 grams, I take back 10 grams if I give you 50 I take back with me. In addition to this, the second principle says it must be completed on the spot the transaction must be done with on the spot.
All right now I would request some of you people who are posing the questions hold on to your questions for the time being because if you keep posing the questions and I keep asking questions in the middle, and you keep answering those your questions will be forgotten. All right. So hold on to your questions. If you have any questions, keep a Word doc open, type your question there. And inshallah when we open up the q&a session for live interaction, you can pose your question there for now, let the chatbox be for interaction with me if I ask you something you can answer this.
Then the has these goes on the Prophet alayhi salatu was Salam said but if they are not like for like
so if it's gold with silver, if it's wheat with barley, if it's dates with salt, you know, they are not like polite, then the property
To the lawyers and themselves
you can exchange them in any quantity that you want I can give you 10 grams of gold in addition and in return of that I can take back 200 grams of silver
however, the second condition that the Prophet salallahu alaihe salam has said is that this transaction must also be completed on the spot.
Other words you will find in some books they say hand to hand on the spot hand to hand Okay, so it's like for like, then it should be equal for equal and hand to hand.
And if it is not like for like then the quantities can be as you want, but it must be hand to hand on the spot. Now I need you people to tell me in the chat box, is this clear to you so far? All right, is the explanation of the honey is clear to you we are not interpreting it further now. We're just leaving it to the understanding of the understanding clear to you six are verbally commodities have been mentioned. Gold, silver, wheat, barley, beef salt, the prophet alayhi salaatu wa Salaam has said that when you exchange these six transact commodities, if they are like for life, they must be equal for equal hand to hand. And if they are not like for like, you can exchange in whatever
quantities you want, but it must be hand to hand.
Okay. abdulrazaq says he doesn't understand what is equal to equal by equals equal it means Yeah, exactly. If I give you 10 grams of gold, I should take back 10 grams of gold. I can't tell you.
Here is 10 grams of gold give me 20 grams of gold, I can't do that. So if it is like for like commodities, if it's gold and gold being exchanged with one another, then it must be equal to equal if it is gold with any other things, any other Republic commodities, then it can be in any order. I hope this is clear to all of you all right, we moving forward inshallah Habana? All right.
Two main criterias can be understood in the light of this handys the first
Yeah, I mean, I don't know what you mean by any order Amar. But, what I meant was that these are six commodities, probably commodities, all right. Now, whether you exchange them no problem, you can keep extending one with the other in any quantity No problem, but it was the on the spot on the spot is the only thing which is common.
All right. Why is this handy? so important. This is becomes extremely critical, because people who will further study if they if you're a finance student, and Islamic finance student you will study about very old stuff,
which is the foreign exchange transactions foreign exchange and foreign currencies etc. Then the principles of these hobbies will apply.
You have to understand and that in this Hadees what we are understanding is what kind of a transaction we'll need to remember when people ask what is the stigma behind this Huggies Why would I exchange 10 grams of gold with 10 grams of gold on the spot what is the wisdom behind it
the women folk will understand this better, because many of you have your little treasuries you know jewelry is which you have collected over a period of time small small jewelleries you collect them this like 100 grams of jewelry is that you have some earrings here some nose rings here and some fingering and on and on and on. What do you do with them about 100 grand, you go to the jeweler shop, and you say that Listen, I need to buy 150 grams of nice hearing for myself. So there is 100 grams of gold collective, which you are exchanging in against which you take 150 grams of gold, and you tell him that for the additional 50 gram, I will pay you cash money. This transaction is Weber
because the gold of 100 has been exchanged with 150.
You have to complete the transaction separately.
The 100 grams of gold must be exchanged separately. The work and the cash must be done on a second transaction. I explained this to you. I'm gonna go a little slower.
Bilaal may Allah be pleased with him comes to the Prophet alayhi salatu was Salam. And he says, Yeah, Rasulullah sallallahu alayhi wa sallam, look what I've got for you. I've got some superior quality of dates for you. And it was about one PSA of dates. It's like a measurement. You don't like about 10 grams of data. 10 grams is two less. So you know 10 kilos of data, you know, he's got 10 kilos of data for the Prophet alayhi salaatu wa Salaam of superiority
Quality. I'm just giving you a rough measurement. The Prophet alayhi salatu was salam, Aston Villa Where did you get the money from? So Bilal says Yasuo, Allah says Allah you know we had about two PSA of inferior quality gates in your house. So like 20 kilos of inferior quality data in your house. I went to the marketplace I told them sure trader take these inferior quality of dates 20 kilos, give me those superior quality of days. Remember the hardness is on dates being exchanged with dates remember the six Robbie commodities
Alright, so what did the prophets of Salaam told bill? He says Avila This is the essence of Riba. Subhana. Allah is telling Bilal what you've done, this is the essence of Riba, you've gone ahead and exchange 10 grams, or 10 kilos or one sack of dates, or two sort of bits, and have taken in return one star of superior quality of data, what you should have done ovelar and the profits isn't gives away out is you should have sold the two sort of dates in the market realize the money in your hand. And with that money, you could have gone ahead and come out bought the superior quality days. So what has the prophet SAW Selim done he's given a solution. This is why I told you that when you go
to the jewelry shop and you have some gold with you exchange that gold,
take the money in your hand complete one transaction and then proceed with the second transaction.
Because generally what we find is
that we give some old jewelry and they give us a written receipt. And they tell us okay, you come back to us after 15 days you're sure the new jewelry will be designed and made ready and you pay the additional amount. These are what's happening is we are doing all the transaction in one sitting
and not two separate transactions you need to break it down into two separate transaction in the light of the heaviness which I just shared with you of Allah, the prophet alayhi salaatu wa Salaam is broken it down for us. So, when it involves one of these six robotic commodities, we need to be extremely careful.
Many of the sisters here will be able to tell me do you people have in your part of the world wherever you are, you have these schemes being offered, where every month you deposit a certain amount of money with your jeweler, you know you give him 5000 rupees for the next 11 months and in the 12th month, you can buy the jewelry within every month you buy one one gram of gold or two grams of five grams of gold and at the end of the year they can give you a certain
percentage do you have some kind of a scheme Like this?
Like a systematic investment plan every month some amount of money is being paid in command comment in the chat box. Do you have such kind of schemes?
hammered someone says yes. Hamiltonian is from the south so he would know because I know Malabar cold and other companies have it big time and these are Malabar gold is run by Muslim group as far as I understand. All right. So what they do is alright, maybe it's not happening day in Pakistan, but I can tell you that in India, it's very common, where every month people deposit certain amount of money at the end of the year. That money accumulates with a jeweler and then he gives you whatever the market rate is on that day. That value of gold you can buy from them. So what happens is you don't have to spend at one go after one year. He breaks it down for you. So every month you
What is this allowed, this is not allowed. Because the Prophet alayhi salaatu wa Salaam said that if you exchange gold with any other commodity, here, it's not gold with gold, you're paying money to buy gold. So there are two different commodities but the Prophet sell selling gave another condition here that if you want to exchange you can exchange any quantities you want, but it must be on the spot.
The transaction must complete on the spot. There is no system of paying money to your jeweler to your designer, the one who designs jewelry for you on a monthly basis like an installment and at the end of the year you buy jewelry worth 60,000 rupees, this is not a lot. It has to be one transaction. If you pay 5000 rupees in one month, you take from him jewlery worth 5000 or you buy Guinea worth 5000 that is allowed on the market rate and you keep doing it that for 11 months and you keep the guinea with you and in the 12th
You can collect take all the 11 guineas that you have, and tell him that you're the Guinea, whatever the total value is, now make a jewelry for me, this is allowed. But what they offer to you EMI gold, this is not allowed, EMI is not allowed. If you are buying gold, it must be completed on the spot. This is an extremely important aspect which I'm telling you, because there are a lot of gold schemes running. When they tell you don't have to worry about buying gold pay with us, we'll give you units, we will keep the goal you know these you have this call the exchange traded fund, Gold Exchange Traded fund, these are not alone.
According to the better understand house, I don't know about the fatwas of the scholars who may be allowing it. But according to the studies that we have here, it's very clear this is a case of rubber. Another kind of robot which we find in gold transaction is which was very common in India, about a couple of years back and all of this got bursted. If these were the Ponzi schemes in India, they were running in the name of gold schemes, they would tell you to invest with them, and they will tell you we will buy gold on your behalf and we will trade with gold and we will give you the profit. If they make you sign on a contract where they are going to use your money to buy gold, then
the gold must be deposited in your name and it should be handed over to you on the spot.
There is no system of I buy the gold and I keep it with me in my locker in my safe locker. That's not allowed. I hope this is clear, we can go on with this but I will just keep it short for the time being. So what are we understood in the light of this headings, we've understood that if it is the sixth rybovich categories, let's talk about just these six commodities, if they are of the same type golden gold, wheat and wheat, barley and barley dates and the silver silver salts on the exchange should be on the spot and it should be equal in quantity All right. The second thing which we learned is if they are again one of the Republic category, but they are different in type which
means gold being exchanged with silver wheat with barley or dates with salt, one of the six Ramallah category is being exchanged with the other the condition is it should be on the spot, the quantities may differ.
The third thing that we learn in the light of this studies is that if they are different in type all together, which means you're exchanging currency with dates, nowadays you have currencies, this hobbyist does not mention currency. So, what happens in this case, we say that when it involves currency, then delay can be permitted, but in equality is also permitted with conditions.
And the last thing that we learn over here is that if there is an exchange taking place between non vaibhavi items, which are not mentioned in this Hadees it could be like a jeans being exchanged for a shirt, you know I have a jeans I want to exchange that for a shirt, they are not under the Riba category. So for them, it could be in any matter in any way we want. All right, jeans can be exchanged with the jeans, no problem. It could be on the spot, it could be delay, it could be equal it could be unequal that's your look, you know I've got a better brand jeans I go and you know I take some two of my inferior quality jeans and I buy a superior quality jeans. Is this allowed? Yes,
this is allowed because these are not one of the six Rebbe v items. So the Rebbe v items have to be understood. Alright, and we need to follow that. And the definition of gold and silver becomes a little more broad in today's sense.
Because when we talk about currency, and I know some of the people are worried about the fiat currencies that we have the currencies that we use in the market today, I make it clear over here that the currencies that we have would fall under the definition of gold or silver. All right, most of the scholars put it in the definition of silver, the ruling applies to currencies as well, the kind of money that you have, it will apply to them as well.
Is this clear to all of you as far as Russia is concerned? Can I have a quick reply?
submit your question, I'm just answering that since I gave an example it is not a rebar because jeans is not falling under the rebar category, right? But suppose tomorrow, we live in a banana republic, where jeans becomes a medium of currency and people start using it as a medium of money. Then the rulings may change or
But generally speaking, when you talk about genes being exchanged with genes, it's not in the robot category. So that rule will not apply.
All right, we'll take some other questions later, I just want to quickly run you through some more of the prohibited transactions, which are here. All right? What are some of the prohibited transactions apart from Riba? And you'll be surprised, because many people come back and say, why is insurance prohibited? What is the reason behind insurance being prohibited? If I take a pure life insurance policy, there is no robot involved in it. If I take a health insurance, what is the FBI involved in it?
I pay for the premium. I don't pay for investment. You know, the pure life insurance policy, we're not talking about the ones where you get a return, you call it the whole life policies, you have these pure health insurance plans, which are not written based plans, you're not supposed to get any money in terms of return. But they work like a traditional insurance plan. What's wrong in that there's no rubber involved.
This is where we need to understand that in Islam, rebar is not the only prohibited transaction. There are other forms of prohibited transaction as well. One of them is called varad.
Okay, I'm going to type it in the chat box, just in case you are not able to follow me, it's called Earth. Alright, okay, sorry, I've typed it wrong, just a second.
That's the term that I'm calling around. Now, what is learning or could have various meaning it can involve meanings like risk, uncertainty, deceit,
it could lead to dispute because things are not certain things are not clear. In a transaction, there's lack of clarity in a transaction. So you use the term for it as a word or means anything, which is not clear anything which is open for further interpretation, you can interpret it in different manner, I interpret it in a different manner, which means there's lack of clarity in the contract, these are transactions or these terms are called verbal terms in the contract, okay. Now,
as far as the prohibition is concerned, unlike River, which is absolutely prohibited,
or does not have an absolute prohibition on
some of the scholars are of the view that if there is vert minor, or in any transaction, it can be tolerated. some level of error can be tolerated. Okay. However, major form of error is not tolerated. What is the major error, and what's a minor or a major hurdle could be one way or the outcome of the transaction is not known.
And this happens with insurance. When you buy an insurance contract, you don't know what the outcome is, I don't know whether I'll get the money. Or you will benefit from the premium. Both the parties are not sure the insurance company is not sure. And I'm not sure. When will I pay the money? When will I get the money? If I die, my family gets the money. What if I don't die, I don't get the money, or the family doesn't get the money, the money is remains with the company. The company doesn't know whether you're going to die according to the conditions which was mentioned there. Because by the way, some of the insurance contracts in India, for example, they say that if it's a
strike, you know, you have this concept called been in India, I'm sure you have it in your part of the world as well. strikes been where the whole nation comes into a lockdown this if you come out on abunda day out of your home, and if something happens to you, you become a victim of, you know, the riots which is taking place, the insurance company says we will not give you any coverage on that day. There are some insurance companies who have these conditions. So again, the insurance company doesn't know. You also don't know your company tells you where you're working. Sorry, sir. There's no munden strike. We're working in a corporate world you need to come and report for working to the
work and you move out of your house to the workplace and Subhanallah an untoward incident takes place and now the insurance company says we will not pay you anything towards your health cover, we will not pay you for your medical treatment. So, these are examples of major form of error in a transaction. You don't know what will happen. There is no clarity in the transaction.
such kind of contracts are extremely dicey. It needs to dispute between both the parties and having worked in a financial institution.
And having at one point of time sold insurance products, I can tell you, I've been to insurance offices. And I've seen how people have been fighting with insurance companies to convince them that so and so family member has got such and such illness, and they need to release the money. They're trying to convince them. So there's dispute taking place between the insurance company and the ones who bought the contract, these kind of disputes keep taking place.
So, that is why it becomes very clear to us now, why insurance is being made is prohibited by almost all the scholars, all the renowned scholars say, all forms of commercial insurance as you have it in the market today, they're prohibited.
Now, what we want the Sharia what the Sharia says is such contracts need to be specific, they must specify details as far as possible.
It should not be so vague, that it is left for open interpretation. you interpret it in one way, and I interpret it in another way. All right.
We have a hadith in Sahih Muslim where the Prophet alayhi salaatu wa Salaam said that he forbade any trade any sales that involve her. So the ruling on whether we have a verse in the Koran as well. And we have the Hadith in Sahih Muslim. Now we find similar transactions taking place in the stock market, people who invest in the share market, they will know there is something called short selling, I don't know if you've heard of this, I'm going to write this in the chat box. So you can read it. Something called short selling a short selling concept is one way I don't have the shares, what I do is I borrow the share from the broker, you see, when you want to invest in the share
market, you need to deal via a broker. All right, so the broker gives you the platform. So I tell the broker, I want to short sell, what is short selling, I tell the broker, please give me 10 shares of Microsoft, as alone, he gives me 10 shares of Microsoft, well, he doesn't literally give me 10 shares of Microsoft, I asked the broker, we sell 10 shares of Microsoft, I don't own it. But I'm going in for a short selling transaction. So
the broker sells 10 shares of Apple, and the money gets credited to my account. And remember, I've taken shares, I've taken borrowed 10 shares from the broker, the broker needs to be repaid back that 10 shares thing is I'm telling the broker, look, sell 10 shares of Apple and give me the money. I bought 10 shares of Apple from him, okay, I haven't borrowed money, I bought 10 shares of Apple from Apple, or Microsoft could be any company.
Now, what I do is this is there's a timeframe which is given to me. And within that time frame, normally it could be five days, 10 days, 14 days, I have to repay back the 10 shares to the broker. So what I do is in this period of 10 days, I will try and see which of these days does the price of the apple shares all
today is the 21st of June, I went to the broker, I told him, please sell 10 shares of Apple or Microsoft and I got the money in my account, I have the money with me. Now, in this next five days or 10 days of the contract, I'm looking for a time when the price of the share falls, when it falls, I will use that money to buy the 10 shares. Now, when I buy that 10 shares, I will pay it back to the broker. So I've sold the shares without owning it
at a price which was high and I got the money. And now I use this money to buy the same shares at a lower price so that the difference in price becomes my profit.
This is called short selling.
Is this transaction allowed? It's not allowed for two reasons. One, there is there is uncertainty. What is the uncertainty here, the uncertainty is the price I entered into a transaction of sale first. And I don't even know whether the prices will go up or it will not go up. I'm just speculating, it is going to lead to speculation.
The second thing over here which we need to keep in mind is that such a transaction involves the third form of prohibition. So we started with rubber. Second was we're not introducing the third form of prohibition. The third form of prohibition is you cannot sell that which you don't possess with you
You cannot sell that which you cannot do not possess with you.
Remember, we started by giving the worst Surah Al Baqarah Ayah number 275. The general principles regarding sales is everything is permissible except what is prohibited. So what is prohibited that you can not sell that which you don't own.
However, two exceptions are there to this hadith. Also, this hadith has got two exception, which is proven from the life of the Prophet Sal Salaam, and that is called a Salaam contract. And then it's this new contract. I'm not going to get into the Salaam and it's not today, it's going to only confuse you it's for academic discussion. This session, I'm trying to just give you a brief background so that we can correlate it to a practical life. So Riba prohibited for
minor error can be tolerated, where do you find minor? A minor error is one which does not change the outcome of the contract. It is something which does not directly affect the rights of any one of the parties.
Okay, or a verb, which is there in a gratuitous contract, a charitable contract, in a charitable contract, one party who gives the charity is not looking for any benefit. So even if there is a hoarder over there, it doesn't affect anyone.
All right. And the third aspect, which I want to mention over here is you cannot sell that which you do not possess.
The fourth prohibited transaction is gambling. Myself, many people will invest in bonds, price bonds, lotteries, these are all prohibited myself PMR. You know, loosely both are translated as gambling, they both are prohibited, you're not allowed to deal in them.
And what happens in gambling is there's something called a zero sum game, I benefit,
benefit at my law. So we both put money, and we both take a chance. If you win, you get my share, and I use my share. So you get plus 10, I have minus 10. So it's called a zero sum game, your benefit, plus my loss is zero. If you gain Can I lose 10 plus 10 minus 10 is zero. It's called a zero sum game.
zero sum game kind of a gambling is not allowed. And we know the verse in the Quran is very explicit, prohibiting myself Surah Al Miranda, verse number 19, where Allah subhanho wa Taala has clearly mentioned that these are from the work of the Shakedown, these are Satan's handiwork, and we must shun such abomination that we may prosper. And there are other forms of prohibited transactions as well, which includes speculation, it includes manipulation, lying in contracts, you know, you lie and sell things. It happens in the insurance market, I can tell you, I've been in the market, I can tell you these insurance agents, they come and tell you to buy the insurance product, they don't
disclose the charges, which are they leave alone, the insurance being harassed in the first place. Even those who are involved in the business, apart from the fact that they are selling that which is haram the file on their sins by manipulating in line, you can't lie and sell, I have this pen, I want to sell this pen to you. But I this I lie or manipulate something about this pen, I don't tell you that half of this pen is used to
manipulating I have a phone to sell, I have a used phone, which I want to sell to you. And I don't disclose some of the defects in the phone. Why? Because I know if you come to know, when you will reduce the price manipulating is this allowed. It's not allowed, as inflation is not allowed. And unfortunately, these kinds of manipulation is so common in our Muslim communities today, whichever part of the world you are in the Muslims in any part of the world are not extra righteous or right. No Muslim can say that. Look, people in my part of the world are super righteous, alright, you're part of the people are hopeless. They you find these challenges every way animal
hoarding, because of which you create an artificial scarcity in the market, so that the prices of that good rise in the market. So I take some onions and I start holding onions. Why? Because I want to create an artificial scarcity once the prices start rising. So what I try and do, I abused the free market. And the profits. Helton was very strict about people who enter the free market and try to play around with it. And the best
example of this is seen in the life of Omar Al Khattab raviolo and who who saw people who entered into a free market and they drop the prices of the goods. So that the competition can be thrown out of the market, we see that happening in the world today, all your big industrial giants what they do, they enter the market, they put down the prices, so that all the competition is thrown out. And then they become monopolies they monopolize the business and they raise the prices, such kind of practices manipulation, holding, we were speaking of onions where you hold and then you wait for the prices to rise and then you release the onions in the market at a higher price, this is not allowed.
Okay, so, these are some of the prohibited transactions that we have discussed in the session, I have given you a brief about what rebar is, now we are in a better position to look into some of the transactions which affect us in our daily lives. All right, so we will get into that inshallah Allah. But before I move forward, I just want to remind you that I have done a course, which is titled The same thing, money matters. From an Islamic perspective, I'm going to share, I hope all of you are part of the different WhatsApp groups which are there, and you people have registered already. So I'm going to share the link with the organizers, and they will share the link with you
in the whatsapp group. I will strongly recommend you people to take of this course it's called money matters in Islamic perspective, there are about six hours of recording. All right, this was just a one hour presentation. That's a six hour session in which we touch upon different topics we touch upon how to
what are the transactions which are permitted in Islam, what are the prohibited transactions, we introduce the subject of rubber, we talk about rebar in the floor and we talked about rebar in the Hadith. We try to really look into the hardness of about an assignment right? We just mentioned about that Cadiz gold for gold, silver silver. So what are the basic principles which can be derived? What are the Islamic ruling on river? What is the effects of Riba in a community? We talk about her myself much more in detail, what are the requirements for a valid sales contract? If I want to do sales? What are the basic conditions which should be fulfilled? In order for a contract
to be valid? What are the transactions which affect us in our daily lives? And what are the Islamic alternatives to transaction affecting us in our daily life? This course is offered by the Islamic online university on the platform called the il Institute. And this course is available at $30 was priced at $60. But it's currently being offered at $30. So 50% discount. So I would recommend people to take this course insha Allah for those who wish to get into a more academic discussion, and of course, you are free to get in touch with me, you can put forth your questions to me as well through my email. With that, I would like to just hand over the session back to the horse. And then we can
take forward the questions in Charlottetown barakallahu, pico
de zachman doctor, this was very comprehensive, very
informative. Does that sound okay for the amazing session