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ISLAMIC BANKING

BY

MUFTI ASAD GULISLAMIC BANKING

OFFICERTHE BANK OF KHYBER

1Feb 02 , 2016

Observed through the Al Ahkam (rulings) upon which Fiqh (Islamic Jurisprudence) rotate around. The rulings are categorized as follows:

a. Wajib (obligatory) e. Haram (unlawful)

b. Mustahab (recommended) (Sunnat) c. Mubah (permissible)

d. Makruh (disliked)

Wajib- An obligatory action or something that shall be performed. Anyone who leave it is liable to gain the

punishment of Allah s.w.t. in the Here after as well as a legal punishment in this world.

Haram- An unlawful action or the one that shall not be performed and is strictly prohibited. Anyone who

engages in it is liable to gain the punishment of Allah s.w.t. in the Here after as well as a legal punishment in

this world. Mustahab- A recommended action or something that

should be performed. Mubah- A permissible action or something that is

neither encouraged nor discouraged. Makruh- A disliked action or something which is

abominable and should be avoided but not in strictly prohibitory terms.

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Islam

Aqidah(Faith & Belief)

Akhlaq(Morality & Ethics)

Shariah(Practices & Activities)

IBADAT(Man to God Worship)

Muamalat(Man to Man Activities)

Political Activities Economic ActivitiesSocial Activities

Banking & Financial Activities

Fulfillment of Financial Needs

Own Capital Others’ Capital

Equity Financing Debt Financing

The name bank derives from the Italian word banco "desk/bench.

In practice, the word “Bank” means an institution which borrows money from people and lends money to people for

interest or profit and provided other financial services.

The body which is promoted by Hiram sources is bound to hellfire.

On the Day of Judgment, a person will not be moved from the place where he stand until he is asked about

the sources of his income and they way he spent it. Purifying of the needs of life (food, drink, clothes

house etc) is one of the most important reason for the acceptance of prayers by Allah.

Accepting money Processing of payments by way of

telegraphic transfer, internet banking, or other means;

Issuing bank drafts and bank cheques Lending money

Providing documentary and standby letter of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures

Safekeeping of documents and other items in safe deposit boxes

Islamic banking has been defined as banking in consonance with the ethos and value system of Islam and governed, in addition to the conventional good governance and risk management rules by the principle laid down by Islamic Shariah.

Shariah compliant banking, to enable Muslims to do their banking transaction in a Halal way.

Achieving the goals and objectives of an Islamic economy.

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“O you who believe. Fear Allah, and give up the Riba that remains outstanding if you are (in truth) believer”. (11:278).

“If you do not do so, then be sure of being at war with Allah and his Messenger.” (11:279)

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What is Riba?The word “Riba” literally means excess, increase or addition.

Any amount over & above the principal payable in a Loan Agreement recoverable as Contractual Obligation is Riba.

In the words of Prophet (SAW) “Every loan that draws interest is Riba”.

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OBJECTIONS ONISLAMIC BANKING?

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1.

COMMON MAN OBJECTIONS.

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COMMON MAN OBJECTIONS.2. ISLAMIC PIG

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COMMON MAN OBJECTIONS.3.ISLAMIC BANK = CONVENTIONAL

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4. COMMON MAN OBJECTIONS.

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NO PERFORMANCE IN SOCIETY

5. COMMON MAN OBJECTIONS.

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COMMERICIAL RIBAVsUSURY (INTEREST)

6. COMMON MAN OBJECTIONS.

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QUESTIONS:

muftiasadgul@gmail.com