CIFP Part 1Shariah Aspects in Business and finance

An overview on the Islamic financial transactionfinancial transaction

D Ah L hDr. Ahcene Lahsasnalahsasna@gmail.com

Classification of Shariah principles in financial transaction

ClassificationClassification

Sale-based principles

Profit-sharing principles

Lease-basedPrinciples

Fee-basedPrinciples

Free-of-chargePrinciple

SupportingContract

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Sales-based Principles

(fundamental contract incontract in Islamic law)

Transaction base on

l iti

transaction base on

h

Transactionbased on

deferment of Paymentlegitimacy

of contract exchange

items of Payment

or subj. matter

Sale sahih

Barter trade(b i l

General sale(b i (forex) N l l

Bai bithaman ajil

S l ith

Forward contract

bai al-mulamasahsale is concluded

by touching an article (bai al-

muqayadah)(bai

al-mutlaq)

(forex)al-sarf Normal sale Sale with deferred

payment

contract Bai

al-salam

article. bai al-hasata transaction

determined by throwing stones

Sale Batil Requirement 1: commodities are of the same genus then immediate deli er and eq alit of the co nter al es ha e to be

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class

ribawi items

delivery and equality of the counter values have to be observed.2: If the items differ in kind then they should be exchanged in the same session of contract

Transaction Base On

disclosure of Cost and price/ loss

No reference is made as to the cost price and profit/loss made by the seller of the object

Normal bargaining Sale

(B l h)

Fiduciary Sales Buyu al-amanah)

the buyer depends and relies totally on the integrity of the seller as regards to the cost(Bay al-musawamah) Buyu al amanah) integrity of the seller as regards to the cost and profit/loss that he discloses to the buyer

Bai al murabahah Tawliyyah Wadiah Cost-plus sale

sale in which the object is sold at a price covering the purchase price plus a

Resale at the stated original cost with

The seller resells the object at a discount from

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purchase price plus a profit margin agreed upon

between the contracting parties.

gno profit or loss

to the seller.

jthe original cost at which the

object was obtained.

Lease-based Principles

IjaraIjara

Ijara or Manafa at al-ayn Ijara or manfa at al amalCorporeal property Personal service

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Fee-based principle

Kafalahfor the purpose of safeguarding the

f

Wakalah (Agency) consists of one person empowering some other person to perform some

f hi h b h l dright of the creditor and to ensure the safe return of his amount of capital

acts for him, whereby the latter stands in the stead of the former

in regard to such act

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Free-of-chargeP i i lPrinciple

Quard HassanQuard Hassan

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Supporting pp gcontracts

Hawalah Wadiah RahnRahn

the assignment or transfer of debt from the liability of the original debtor to the li bilit f th

giving another person an agency for safekeeping

of ones property l l i

It is the act of taking a valued property from its owner, as a means of insuring a loan that has matured

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liability of another person or legal possession a loan that has matured or is about to mature

Th k YThank You Wasalam

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