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Muslim Affairs Team
Answer
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Name
Amer - Australia
- Australia
Profession
Travel Agent Owner
Question
Do you think That the Islamic Bank system is worth investing In and meets all Islamic Rules.
Jazakom Allah Khairan.
Answer
I definitely believe so. Especially in the West like in the United States and other countries because of the regulations and transparency requirements
Name
Amrozy
-
Profession
Question
What is Takaful? Dou you work on Takaful? Do you think that Takaful be appropriate in non-Muslim societies?
Answer
Takaful in Arabic means mutual support or according to today's language, it is Insurance. It was pioneered and institutionalized by Muslims to use it as an insurance against piracy and desert hijacking during Caravan trading.
The way it was done was to pay a "hiba" or a fee or in today's language a premium into a fund. This fund would be used if there is a loss. If there is no loss it is returned to participants in pool.
In today's structures there are such insurance companies. They are structured as Cooperatives or Mutual Benefits corporations.
The other corporate structure: For example, a C-Corp or a shareholders' company - is not acceptable based on the Law - Shari`ah, because the shareholders only and not the insured who pay the premiums - benefit in case there is a surplus leading to Gharar or deception.
Name
Tarek
-
Profession
Question
As-Salam Alikom,
In an Islamic mortgage contract, if the person who buys a house over a period of 20 years is mid-way unable to continue paying his monthly payments, does he get a partial refund for the first ten years payments?
In the second case, if he is ,say for four months, late paying the monthly payments due to shortage of liquidity, would he be subject to a penalty clause?
Answer
In that likelihood and based on the models used at LARIBA.com, which uses the models developed by Sheikh Qaradawi and others. Taqi Usmani noted in his book the following steps, which are taken by LARIBA:
1.We meet with the client to assess the situation.
2.We give the client a grace period depending on the situation. Like if she or he is looking for a job, then we give a grace period.
3.We agree that the brother or sister sell the house if they cannot afford the payment , but not foreclosure or throwing them out in the streets. We adhere to Tarahum concept.
4.Customer loses only up to equity and the rest of loss is for LARIBA. In case there is profit. Then it is for the customer.
5.Ideally, the profit must be shared and we invite those who volunteer to do so.
Name
Tomasz
-
Profession
Question
As-Salam Alikom:
I was reading about how to buy a house through an Islamic Bank. The article said that the bank and the buyer become partners in buying the real-estate. In order for the buyer to have full custody, among humans, of the house he has to pay the bank a Profit Payment. Put another way, he has to "buy the stake the bank has in the place'."
That is usury made to look like something else, is not it?
Answer
First of all let us define RIBA:
It is the act of lending money at a price called interest rate.
There are two types of things in this world:
1. Fungibles like an apple, a tree, a meal that we eat...etc. These can not be rented and money is a fungible thing. It cannot be rented. You cannot rent an apple from me, because the minute I lease it to you and you eat it then it becomes yours. So, you can not rent an apple. The Same with money. You cannot rent it. You can only use it as a measuring device especially if it is "paper" money.
2. Non-Fungibles like a house, a car, and the like. You can own it (milkul Raqabah) and you can lease the use of it. for example, you can own title to a car and you can rent the use of the car.
In our model at LARIBA, the bank and the buyer share in the monthly rental rate not of money, but of the actual rent we measure in the market of a similar home in the same neighborhood with same specifications.
Name
Leo of Tripoli
-
Profession
Question
Could you tell us about the experience of LARIBA house? how do you increasingly establish your grounds in the United States?
Answer
The Prophet(peace be upon him) was reported by his wife Aisha that "When he was given a choice between two solutions to a problem. he (peace be upon him) would start by the easy to achieve solution then slowly progresses to the more difficult ones."
We have started small, we have relied - from the beginning on our own resources. For example, we did not go hand-in-hand to our rich brothers and sisters, especially In the oil-rich countries - because if we are really serious, we should put our money where our mouth is.
We made sure that our own community members do the work inside out and we are committed never to use Islam as a marketing tool by using sales people on the outside but the inside is the same old Riba-based thing.
We also, were very patient, committed and consistent. We started in 1987 with a small $200,000 from around 20 participants and today by the grace of Allah we are serving- between Bank & Finance Co. - a over a $300 million portfolio.
We are rated the top in our service fields and A 5-Star rating on bank. We thank Allah and our dedicated staff for this.
Name
kamaal
- India
Profession
medical student
Question
To what extent the Islamic finance have impact in American economy ? will Americans accept the Islamic finance system and how much influence does it has in the United States?
Answer
For the whole US Economy, to a very little extent. Statistics tell us that Riba-Free Banks manage up to 1 trillion (1000 billion). For comparison, Lehman Brothers which failed , though not a large institution in America, was worth over $600 billion.
For the local communities of both Muslims and non-Muslims, it is wonderful and is slowly respected , as well as admired. At the bank, over 95% are non-Muslims. When we deal with them, share with them our Riba-Free banking values, they tell us we have not heard bankers talk like this before.
By the grace of Allah they send their relatives, family members and friends to do business with us.
Please remember that we use Riba-Free which is what we do. Using "Islamic" is very exclusive and is limiting, because people may think it is for Muslims only. We learn from our Prophet (peace be upon him).
Islam is what is entrenched deep in the heart. and is manifested by the way we conduct ourselves while dealing with others.
Name
Ahmed
-
Profession
Question
Al Salam Alikum,
Why don't you finance co-ops? Is there a plan to finance that form of housing in the future?
Al Salam Alikum.
Answer
I do not understand what co-op means? We finance all types of homes and the like.
Name
M. Elnady
-
Profession
Question
Do you think the Islamic banking system is the best for today's world?
What are the main concepts of Islamic banking, which many see as the same as any other bank. What's exactly Riba and what is not?
Answer
I sincerely believe so. Islamic Riba-Free Banking is not only about the "mechanics" of changing words as some do. It is about a relationship with Allah that includes trust, honor, responsibility, fairness ,and most important realizing the real weight of Amanah - trust - before Allah subhanu watalah.
It is a system that caters to all, including rich and poor, strong and weak. It is believed that credit is indeed a Human Right defined by Allah.
Regarding concepts, it is our challenge as Riba-Free bankers to come up with Riba-based innovative products and services that are better, but in the same time can be easily compared to existing products in order for the consumer to compare.
Nowadays all people in the world have been trained to think in terms of interest rates!! We need to slowly and patiently explain these concepts to them.
Name
Editor-Amr
-
Profession
Question
In the light of the current crisis, what is expected from Islamic finance and economy?
Answer
We need to implement the real spirit of Islamic finance, not just the form. Most of the structures I see worldwide in Islamic Finance are indeed regular structures which are "fixed" to make it look "Islamic."
We need to make a difference on the middle-class citizens. Most people believe that Islamic Banking is only for the rich. The Qur'an Teaches "Kai La Takoona Doolaton " meaning that the purpose is to minimize the propensity of the rich dealing with each other.
We need to go to the real essence of Islamic Banking using the Commodity Indexation (using Gold & Silver or Food Staples) to price things. Not just "paper" fiat money. We need to make things to the market not just take the interest rate of the day and call it rent.
Name
Sister
- United States
Profession
Question
Can you please explain how LARIBA is financed? If the financing comes from a Conventional Bank - Whittier bank - is this Halal?
Answer
Yes, it is Halal and Allah knows the absolute truth.
LARIBA Bank of Whittier and the like are institutions that operate according to the Law of Shari'ah.
Sources of Funds: Shareholders, Investors, and depositors in the bank, you could visit: www.LARIBA.com for details.
Name
Yakubu
- Nigeria
Profession
Public Service
Question
Salam,
I am in a country where Islamic banking does not virtually exist and I need mortgage loan/capital for business. Do you think that it is allowed to transact with those Financial Institutions that are Riba-based?
Answer
There is a an important fundamental rule in Fiqh which is called: Maqasid al-Shari`ah: the main purpose and goal of Shari`ah:
Daful Dharar Wa Jalbul Manfaa: bringing in what is beneficial and pushing away what is harmful.
Imam Abu Hanifah Al No'man states that la Dharar wala dhirar: meaning you cannot hurt yourself by trying to apply Shari`ah and that is where concept of Dharoorah or absolute necessity comes from.
So, if you absolutely need a loan from a Riba-based bank and you do not have any Riba Free institutions, may be you can and Allah knows the best.
Name
AbdelRahman
-
Profession
Question
Do you face obstacles working in the United States and dealing with other financial institutions. Do you face problems because you apply " Islamic" financial system?
Answer
No.We have had no problems operating in the United States. I have lived in America for 40 years, and we established our marriage systems, Islamic Centers Operations, Islamic Schools and now Islamic Finance without any discrimination.
We had challenges to explain to authorities what we mean and to prove to them that we are honorable and that we obey the law of the land. The result is simple: The Sky is the Limit and thanks always be to Allah
Name
Editor -Amr Taha
-
Profession
Question
The session has ended. We would like to thank Dr. Yahia Abdul-Rahman for taking the time to answer your questions, and all those who participated in the dialogue.
