ISLAMIC FINANCE

What is the meaning of Riba

• Uncertainty

• Gambling

• Ownership

• Exploitation

The chapters of the Qur’an are known as

• surrah

• sunnah

• shariah

• sufis

WHAT CORE PRINCIPLES OF THE ISLAMIC ECONOMIC SYSTEM

• THE CONCEPT OF BARAKAH

• JUSTICE IN EXCHANGE

• EQUALITY OF LIBERTY

• THE FREEDOM OF CONTRACT AND OBLIGATION

WHAT ARE PROHIBITION OF SHARIAH

• ZAKAT

• RIBA

• LOANS

• INTEREST RATE

WHAT ARE REASON PROHIBITIONS OF RIBA

• It results a negative economic growth

• It increased human personality

• It implies proper appropriation of other people’s property

WHICH IS THE TRUE PRINCIPLE OF AQAD

• TRUSTWORTHY

• RISK SHARING

• ACTIONS COULD BE TAKEN ONLY AFTER ADEQUATE COMPENSATION WAS PAID TO THE OWNER

• AGENTS OF CONTRACTS

WEALTH MUST BE EARNED THROUGH

• RIBA

• BENEFICIAL

• BARAKAH

WHAT IS PURPOSE OF BARAKAH

• To clear any misunderstanding or ambiguity about the responsibilities of the parties to the contract

• To ensure that all parties to the contract have full knowledge of what they are committing to and what their respective responsibilities would be.

• To determine whether or not an individual within the system will find it utility-maximizing to follow the behavior rules prescribed by the system.

• To cover spiritual and temporal or temporary and eternal interests.

WHAT IS COMPONENT OF ECONOMIC JUSTICE IN AN ISLAMIC SOCIETY

• Competition and cooperation must be utilized in probity and piety rather than in evil and enmity

• The concomitant private property obligations from the point of view of justice, are designed to give effect to the interdependence of the members of the community

• The right of the collectivity to the property is protected by the Shariah

• Equality of liberty and opportunity for all members of the society with respect to utilization of natural resources

WHY PEOPLE PAY/RECEIVE INTEREST

• Because they are wealthy

• A guarantee of same satisfaction or utility in future

• Obligations

• Shariah