AsadMasood 09 Arid 406

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NAME: ASAD MASOOD QAZI

Registration No: 09-arid-406

CLASS: BSIT

SECTION: A

ASSIGNMENT OF: PROFESSIONAL ETHICS

TOPIC: Islamic Rules in Business

(With the help of Quran & Hadith)

NAME OF INSTRUCTOR: Mr. Faisal Durani

Date: 27-10-2010


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ISLAMIC RULES IN ISLAM

Islam is an entire way of life, and Allah's Guidance extends intoall areas of our lives. Islam has given detailed regulations for oureconomic life, which is balanced and fair. Muslims are to

recognize that wealth, earnings, and material goods are theproperty of God, and that we are merely His trustees. Theprinciples of Islam aim at establishing a just society whereineveryone will behave responsibly and honestly. The fundamentalprinciples of the Islamic economic system are as follows:

Muslims are not to deal in interest. "Those who devourusury will not stand....Allah has permitted trade and forbiddenusury.... Allah will deprive usury of all blessing, but will giveincrease for deeds of charity..." (Qur'an 2:275-6). "O you who

believe! Devour not usury, doubled and multiplied. But fearAllah, that you may really prosper" (Qur'an 3:130) Thisprohibition is for all interest-based transactions, whether givingor receiving, whether dealing with Muslims or non-Muslims. It isreported that the Prophet Muhammad (peace be upon him)cursed those who pay interest, those who receive it, those whowrite a contract based on it, and those who witness such acontract.

It is forbidden to gain property or wealth by fraud, deceit,

theft, or other falsehoods. "...Give just measure and weight,and do not withhold from people the things that are their due.And do not do mischief on the earth after it has been set inorder. That will be best for you, if you have faith" (Qur'an 7:85).

It is particularly hateful for a guardian to take from anorphan's property. "To orphans restore their property (whenthey reach their age). Do not substitute your worthless thingsfor their good ones, and do not devour their property by mixingit up with your own. For this is indeed a great sin" (Qur'an 4:2).

Forbidden are earnings from gambling, lotteries, and theproduction, sale, and distribution of alcohol. "O you whobelieve! Intoxicants and gambling, sacrificing to stones, anddivination by arrows are an abomination of Satan's handiwork.


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Eschew such abomination, that you may prosper" (Qur'an5:90).

It is unlawful to hoard food and other basicnecessities. Everyone should take what they need and no more.

"And let those who covetously withhold of the gifts which Allahhas given them of His Grace, think that it is good for them. No,it will be the worse for them. Soon it will tied to their necks likea twisted collar, on the Day of Judgment. To Allah belongs theheritage of the heavens and the earth, and Allah is well-acquainted with all that you do" (Qur'an 3:180).

A Muslim should be responsible in spendingmoney. Extravagance and waste are strongly discouraged.

"[The Servants of Allah are] Those who, when they spend, arenot extravagant and not stingy, but hold a just balancebetween those extremes" (Qur'an 25:67). "O Children of Adam!Wear your beautiful apparel at every time and place of prayer.Eat and drink, but waste not by excess, for Allah loves not thewasters" (Qur'an 7:31).

Muslims must pay Zakat (alms). "And they have beencommanded no more than this: to worship Allah, offering Himsincere devotion, being true in faith. To establish regular

prayer, and to give zakat. And that is the religion right andstraight" (Qur'an 98:5). Every Muslim who owns wealth, morethan a certain amount to meet his or her needs, must pay afixed rate of Zakat to those in need. Zakat is a means ofnarrowing the gap between the rich and the poor, and to makesure that everyone's needs are met.

Muslims are encouraged to give constantly in charity. "Yourriches and your children may be but a trial. Whereas Allah, with

Him is the highest reward. So fear Allah as much as you can,listen and obey, and spend in charity for the benefit of yourown souls. And those saved from the selfishness of their ownsouls, they are the ones that achieve prosperity" (Qur'an 64:15-16). The Prophet Muhammad once said that "nobody's assetsare reduced by charity."
http://islam.about.com/od/zakat/p/zakat.htmhttp://islam.about.com/od/zakat/p/zakat.htm


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Trade and commerce have always been a part of Islam. From pre-Islamicdays, the Holy City of Mecca has been the center of commercialactivities. It was indeed the annual trading center of Mecca that provided

Prophet Mohammad the forum for preaching Islam.The early Muslims were not only engaged in trade but they went todistant lands in connection with business. Islam in fact reached East andWest Africa, East Asia through the business people.Islam encourages work in general, and trade and commerce in particular,Prophet Mohammad was himself engaged in this profession before hebecame a prophet. He was a successful businessman. Known forintegrity, he bore the honorific title, the Trustworthy, The Quran states:"God has made business lawful for you"In addition, the Qur'an includes rules not only for manners and hygiene,

marriage and divorce, but it also lays down detailed rules for commerceand politics, interest and debts, contracts and wills, and industry andfinance. Islam has permitted and in fact encouraged business. Islam laysout the basic principles of our economic behavior as consumers,producers and owners of wealth.The Islamic principle in business is based on individual enterprise andcorrespondingly individuals reward. It is basically based on benefiting thehumanity while maintaining Gods orders.In business relationships Islam strictly forbids any discrimination betweenpeople based on their religion, sex, or gender.

There is no basic conflict between good business practice and profitmaking in Islam. Islam looks at profit as secondary way to measureefficiency.

Business ethics in Islam

Trust:

Trust of God's creation and all that is in it. God has created and perfected

the whole universe then Man is set over it all with delegated. So asMuslims we realize that we are just trustee for Gods universe and wetruly do not owe anything in this life. That kind of belief along with yourknowledge that God sees all what you do, will make you work underconstant surveillance, and keeps your performance at its best whilefollowing Gods defined conduct.(Quran 45-13): and He has subjected to you, as from Him, all that is in


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the heavens and on earth: behold, in that are Signs indeed for those whoreflect.(Quran 6:164): It is He who hath made you (His) agents, inheritors of theearth: He hath raised you in ranks, some above others: that He may tryyou in the gifts He hath given you: for thy Lord is quick in punishment: yet

He is indeed Oft-Forgiving, Most Merciful.

2. Justice and Honesty:

Justice can be defined as just conduct, fairness exercise of authority inmaintenance of right and fair dealing between each other regardless offaith is strictly laid down in Islam. Honesty incorporates the concepts oftruthfulness and reliability and covers all aspects of relationships inhuman life thought, word and action. It is more than just accuracy; it is an

attitude with integrity.(Quran 4:135): O ye who believe! Stand out firmly for justice, aswitnesses to Allah, even as against yourselves, or your parents, or yourkin, and whether it be (against) rich or poor: for Allah can best protectboth. Follow not the lusts (of your hearts), lest ye swerve, and if ye distort(justice) or decline to do justice, verily Allah is well-acquainted with all thatye do.(Quran 6:115): Perfected is the Word of thy Lord in truth and justice.There is naught that can change His words. He is the Hearer, theKnower.

(Quran 11:85): O my people! Give full measure and full weight in justice,and wrong not people in respect of their goodsO you who have attained to faith! Do not devour one anotherspossessions wrongfully not even by way of trade based on mutualagreement and do not destroy one another: for behold, God is indeed adispenser of grace unto thee!Oh ye who believe! Eat not up each other's property by unfair anddishonest means." (4:29)

3. Mutual Respect:

The third principle is mutual respect and consideration for others is alsoinherent in the moral teachings of Islam.The application of this has come to mean that self interest only has aplace in the community in as much as it takes into account the interests ofothers. So a person or organization can not under self benefit measurestakes an action or start a business that will harm the community or


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environment more than providing good to it. The prophet (PBUH) said:"You will not attain righteousness, unless you give of that which youlove.And said"God loves kindness when you deal with any matter" Andalso said: "You will not enter Paradise until you have faith and you will nothave faith until you love one another". What is forbidden in business in

Islam?

1. Islam has not permitted producing, selling and purchasing ofgoods, which are prohibited in Islamic law. Alcohol, Drugs.. TheProphet of Islam has said: "When God prohibits a thing Heprohibits (giving and receiving) the price of it as well."2. Islam has also prohibited any kind of transaction involvinguncertainty,as this could lead to quarrel or litigation. The Prophetof Islam has forbidden transaction involving unspecified quantity,acceptance of money for fish in the river or bird in the air as there is

element of uncertainty. Similarly the Prophet of Islam hasprohibited sale of fruit till they are ripened. However; if the elementof uncertainty is very small, the transactions are permissible.3. Islam condemns hoarding to make high profit at the cost ofpublic interest (when it is needed or so it will become needed).Islam, however; allows normal trade - buying and selling of goodsagain and again at a reasonable profit.4. Islam prohibits fraud in business dealings. The Prophet hassaid: "Sell the good and bad separately. He who deceives is not ofus" The sin of fraud is greater if the seller supports it by swearing

falsely. The Prophet has said, "Swearing produces ready sale butblots out blessing".5. Islam prohibits buying or selling whats legal if we know that itwill be used for illegal use: weapons, abortion drugs, drugs formeth making, and so on.6. INTEREST: Muslims are not allowed to pay or receiveinterest. This is a shared value in all religions. The Quran is explicitabout it and says, "God- has permitted for you trade and prohibitedinterest" (2: 275).

Depositors in an Islamic bank would be treated like shareholders, wouldreceive dividends when the bank makes a profit, and would lose capitalwhen it suffers a loss.The prohibition or fixed interest flows from Islam's concern for social justiceInterest is said to reinforce a tendency for wealth to accumulate in a fewhandsSo how would you by buy a house for example? A new trend has recentlystarted that work as follows: An Islamic financing company buys the house.


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The house then is leased back to you for a fixed period of time. You paythe finance group the rent value plus an additional amount for the housepurchase. The value or the lease home will be reassessed every year, andthe rent will be adjusted accordingly. In ClosingTo close let me reassure that it is the responsibility of every Muslim to be

ethical in their daily business practices and to act responsibly toward thecommunity in which it serves. To review its business practices and removefrom its organization any unlawful activities and devote themselves toproductive and lawful activities that benefit mankind.It is everyones responsibility to take a long and serious look at theirorganization and implement policies and procedures that are conducive.As a general guide to Muslims in business we should adopt the followingoverriding principals:

Love God and his commands more than your trade or business Be honest and truthful

Keep ones word Be humble in how you conduct your life Do not deal in fraud Do not bribe Deal justly

Business and Economics

Islamic finance and economic practice, including real estate

financing, business ethics, and the ban on usury/ interest.Economic System of IslamIslam has given detailed regulations for our economic life, whichis balanced and fair. Muslims are to recognize that wealth,earnings, and material goods are the property of God, and we aremerely His trustees. Here is an overview of the basic principles ofIslamic economics, including discussions of interest/usury,gambling, fraud, extravagance, and greed.Islamic Mortgage.Many Muslims, especially those living in non-Muslim countries,

give up on the idea of ever owning their own home. Many familieschoose to rent for the long-term rather than participate in a bankloan which involves the taking or paying of interest. In recentyears, however, the market has opened up to Islamic mortgageofferings which are compliant with Islamic law.
http://islam.about.com/od/business/a/economics.htmhttp://islam.about.com/od/business/a/mortgage.htmhttp://islam.about.com/od/business/a/economics.htmhttp://islam.about.com/od/business/a/mortgage.htm


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When the poor are permanently poor, and the rich, permanently rich, thatis oppression! All around the world today that economic oppression exists,and is constantly increasing, - the poor grow poorer and the rich, richer.Riba is the cause. A predatory global elite, centered in the West, but alsopresent around the world, is constantly sucking the wealth of mankind and

impoverishing the masses through riba. Their ultimate objective is to utterlyenslave all of mankind in a new sophisticated slavery. Political, legislative,

judicial and legal systems, the media etc., are all created by the oppressor,and all function to preserve the system of economic oppression. Allah, theMost High, has strictly prohibited riba. Yet the world today, including theMuslim world, is saturated with riba. This has confirmed the ominousprophecy of Prophet Muhammad (s) who prophesied, in a hadith receivedfrom Abu Hurairah (ra), the following:

There will come a time, he said, when you will not be able to find a single

person in the world who will not be consuming riba. And if anyone claimsthat he is not consuming riba then surely the vapor of riba (In another textthe dust of riba) will reach him. (Abu Daud, Mishkat)

Dealing with riba (usury or interest) has spread widely among manyMuslims today; to the point that many Muslims do not see any problemwith it, either because of lack of knowledge or absent-mindedness. Despitethe fact that all Muslim scholars agree that dealing with riba (usury orinterest) is a major sin because the prophet (S.A.W.) mentioned explicitlyin a hadith reported by Imam Bukhari and Muslim, "Avoid the seven

destructive sins", then he mentioned one of them as, "and dealing withriba (usury or interest)"

Muslims are very particular about Halal and Haram. The confusion whetherinterest is same as usury (Riba) or not, needs a clarification for good. Thisis a historic fact that usury has been prohibited in all original texts of Torah,Qur'aan.

However, practically, Usury or interest is same as a guarantied return tothe lender regardless the borrower makes a profit or not. The Islamic viewis truly just and humanitarian. It requires a lender to participate in the profit

as well as loss of the borrower if any. From Shariah point of view, interestis Riba and it is Haram.

MAY ALLAH ALMIGHTY GIVE US ABILITY TO FOLLOW THE ISLAMICRULES IN REAL MEAN.(AAAMEEEN)

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