A BASELESS ANALOGY
In its endeavour to legalize trading with and investing in riba companies, Albaraka Bank states:
“What is inescapable is tolerable’ – The advocates that argue for permissibility substantiate it by quoting Al Bahooti’s statement, which says: ‘What cannot be drained, like the sewers of Makkah, does not become impure by urine, or by anything else, until its colour or look is changed.”
The principle, ‘What is inescapable is tolerable’, is baselessly employed in the endeavour to legalize riba and haraam wealth. The analogy with the sewers of Makkah is absolutely ridiculous and fallacious. The sewer waters will always be impure whether urine enters it or not, because the colour, look and taste of such waters are always changed by an abundance of impurities. Sewer water is never pure. The discussion refers to clean rain water flowing in street gutters or canals, etc., not to filthy sewer water which does not require a further addition of urine to render it impure. Its impurity is a confirmed fact. The filth (najaasat) in sewer waters is always conspicuous. Yet, inspite of the aforementioned principle, the ruling of impurity will necessarily apply on account of the transformation of the properties and attributes of the water. The ‘tolerability’ of the initially pure water having become impure water is conditioned with ‘colour and look’. It is not unrestricted.
Furthermore, the stupidity of the analogy is self-evident. What is the relationship between sewer water and indulgence in riba- trading? What makes investment in haraam stock companies ‘inescapable’? What suffering does abstention from involvement with riba companies create? If the only well in a village has been rendered impure and there is no way of purifying it, the argument of ‘inescapability’ has validity. If no other water is available, the use of the impure water of the solitary well becomes tolerable in the same way as haraam meat becomes tolerable to save life when absolutely no halaal food is available. But what is the life-demanding need to become involved in trading and investment with ribat enterprises? The claim of ‘inescapability’ in relation to riba investment is a figment of the imagination of the capitalists of these banks.
The vast majority of Muslims throughout the world do not invest in these riba companies listed on the stock exchange. None of them suffer in consequence of non-participation in these companies. Only a tiny minority, namely, the extremely wealthy members of the community, especially the capitalist-minded, invest in riba companies and haraam businesses. Riba and haraam cannever be legalized on any principle of the Shariah for further bloating the pockets and filling the coffers of millionaires and billionaires—of people who are really in no need of the illgotten money which their haraam investments will generate.
Another utterly baseless analogy to legalize indulgence in riba, is Albaraka Bank’s citation from the Al-Majmoo’ of Imaam Nawawi (rahmatullah alayh):
“A sale wherein the uncertainty is unavoidable is lawful although it might involve some degree of Gharar. An example of a sale of Gharar where the uncertainty is unavoidable relates to disclosing the strength of the foundation of a house purchased.”
What is the similarity between the inability to disclose the strength of the foundations of a house and indulgence with the haraam stock companies to earn haraam income? This analogy is fallacious and can never be accepted as a basis for permissibility to invest in riba companies. What makes such investment incumbent or absolutely necessary to justify dealing with companies which deal in riba? Purchasing a building without disclosing the strength of the foundations, is not a haraam act. But riba is absolutely haraam. Disclosing the strength of the foundations is normally impossible. This type of uncertainty does not exist in kuffaar companies dealing in riba and other haraam and baatil transactions.
The Unit Trust brochure states:
“The advocates of permissibility who participate in these stocks acknowledge that usury is unlawful, whether in the form of stocks or otherwise. But the sale and purchase of equities is (are?) lawful because the business activities of these companies are primarily lawful and the unlawful part generated from an illgotten income as a result of usury can be purged, set aside and spent for charity and public interest.”
It is haraam to participate in any business knowing that it generates haraam income regardless of the “business activities being primarily lawful”. The argument of purging haraam wealth by giving it to charity is baseless, in fact, unlawful. Haraam wealth which has by some misfortune come into one’s possession has to be compulsorily eliminated by giving it to charity. Such purgation is not a licence for participation in ventures to earn halaal and haraam wealth with the intention of giving the haraam part to charity. Participation remains haraam.
Participation in even a business in which the activities are 100% lawful can also be haraam if the trade transactions and contracts of a business are baatil and faasid. Even if the only products sold are Zam Zam Water and Mushafs (Qur’aan copies), then too will it be haraam to participate in such a venture. The argument of the business activities being primarily lawful is not valid.
If the agreement on the basis of which the investor acquires gain/profit is in conflict with the Shariah, such yield will be haraam. Notwithstanding the 100% halaal nature of the actual business activity, e.g. the products sold are only halaal foodstuff. However, according to the partnership agreement, Zaid who is a partner receives a fixed monthly sum of money for his capital investment. This gain acquired by Zaid is riba and is haraam notwithstanding the 100% lawful business activities of the business.
In the same way, the gain acquired from investment in equities is riba and not lawful due to the unlawfulness of equities. Since dealing in shares in public companies is not valid, hence haraam, the yield is haraam riba. The gain of this type of investment will not be halaal simply because the trading activities or the products sold by the company happen to be halaal. A massive deception perpetrated by the Muslim capitalists is to present the smokescreen of lawful products in which the companies deal. The public is misled and made to believe that purchase of shares in certain joint stock companies is lawful because they do not deal in liquor and pork. This is not the only criterion for lawfulness in the Shariah. In addition to the products being halaal, the agreement/contract on the basis of which profit is earned must also be lawful. But shares and equities are not lawful, hence the dividend yielded is also not lawful.
THE OPINION OF THE BANK
The capitalist Bank setting itself up as a grand mufti issues the following verdict:
“The opinion of those who argue for permissibility is closer to the truth in this respect, for the following reasons:”
Among the reasons for its opinion, the capitalist bank tenders the following: “The strength of the sources they have cited from jurisprudence provisions and legal principles.”
Let the capitalist Bank furnish the sources of ‘jurisprudence’ which the legalizers of riba have provided for their view so that their strength and validity could be scrutinized. This arbitrary claim is baseless. What are these sources? We have just shown that the ‘legal principles’ cited by Albaraka Bank, have no application in the determination of permissibility in relation to the shares and equities. The principles have been mismanipulated and an abortive attempt has been made to apply these ‘maxims’ to legalize what the strongest Sources declare absolutely Haraam. The strongest Sources are the Qur’aan, Ahaadith and Ijma’ of the Ummah.
Far from Islamic jurisprudence (Fiqh) legalizing the haraam dealings of the stock exchange, it rather confirms the hurmat (unlawfulness and prohibition) of the capitalist systems and relegates the trade in shares and equities into the domain of butlaan (being baatil and haraam).
The second reason tendered by Albaraka Bank for the permissibility view is: “The backtracking of some advocates of impermissibility and their coming closer to arguing for permissibility, (27-29 Muharram 1419 A.H.)”
The alleged “backtracking of some advocates of impermissibility” does not bolster the view of permissibility. Firstly, this claim is highly ambiguous. The reasons for the alleged “backtracking” are mysterious. The backtrackers have not been mentioned. Their arguments are unknown. Their “backtracking” has absolutely no bearing on the arguments of impermissibility. The arguments should be clinically dispensed of by providing solid Shar’i grounds for such dismissal. Furthermore, the views of contemporary liberals really do not hold much weight in the Shariah. Generally, their opinions are heavily influenced by the inordinate demand of the Muslim capitalists to make halaal just every haraam concept spawned by western capitalism.
The arguments of the ‘backtrackers’ are just as baseless as the arguments of the advocates of permissibility—arguments devoid of Shar’i substance –arguments which stretch Shar’i principles beyond the confines of their operation –arguments which employ Shar’i principles to cancel out Qur’aanic and Sunnah prohibitions. The third reason offered by Albaraka Bank for its acceptance of the permissibility view is:
“This would serve in the common interest of the Ummah in the vital economics field of conducting business.”
Should it be accepted that the permissibility view “would serve in the common interests of the Ummah”, then it will be like saying that haraam food would serve in the common interests of the Ummah in the vital field of nourishment and sustainment of life especially in the poverty stricken regions of the world. The fallacy of this type of reasoning should be manifest. Then the claim that the particular dealings of the bankers, such as leasing and selling luxury items to wealthy persons and to the not so wealthy, but generally to people living comfortably and desirous of luxuries beyond their means, are within the ambit of ‘vital’ needs, is blatantly false. It is a naked lie which deceives only the bankers themselves. The masses of the Ummah are not in the least reliant for their living on the facilities of the riba-capitalist Muslim banks such as Albaraka Bank. Their Rizq is Allah’s Responsibility, and He provides such Rizq without there being any need whatsoever for indulgence in riba and haraam.
The “common interests of the Ummah” have to be served by means of halaal, not haraam. Riba cannot be a way for serving the “common interests of the Ummah”. The Qur’aan categorically declares: “Allah increases Sadqah (i.e barkat and the quantity of wealth), and He eliminates riba (i.e. He destroys wealth of riba).” The “common interests of the Ummah” cannot be lawfully and constructively served by the endeavour to legalize riba by means of baseless interpretations of maxims and principles totally unrelated and inapplicable to this issue.
The averment that the field of operation of the capitalist bankers is “the vital economics field of conducting business” is true in relation to only the banks such as Albaraka. The economics of the capitalist Muslim bankers are not ‘vital economics’ for the masses of the Ummah. The masses hardly have any connection with these banks. Furthermore, these riba-banks driven to madness by the touch of shaitaan DO NOT serve the needs of the Ummah at large. It is not their policy to be of any assistance whatsoever to needy Muslims and to the masses of Muslims. The mechanics of their trade is vociferous testification for the wide chasm which exists between the Muslim banks and the Muslim masses. It is more difficult to do a deal with a bank like Albaraka for example, than with a non-Muslim bank such as Westbank. The requirements for passing the applicant’s creditworthiness are more cumbersome and greater in quantity than the requirements stipulated by the non-Muslim banks.
To grant credit on which riba will be charged, the Muslim ribabank requires, for example, 6 months of bank statements and financial statements (balance sheets, etc.) while the non-Muslim bank does not require this much of information. The very modus operandi of the Muslim bank confirms that only a very small group of well-to-do people can benefit from the riba-loans it advances. Let no one be under any misapprehension in this regard. The Muslim bank does not buy and sell anything. It does not purchase a vehicle. It does not own a vehicle to resell at a profit. Its claim of a muraabaha sale is a massive deception, fraud and falsehood designed to hoodwink unwary Muslims. The Muslim capitalist bank does only one shaitaani act –it advances a loan on interest. It then seeks to cover its haraam tracks with names such as muraabahah, etc.
But the veneer of the Shar’i hue with which it has painted its transactions are too thin to conceal the reality of the misdeeds being perpetrated in the name of Islam and under the aegis of signatures of Muftis who have likewise been misled and constrained to issue fatwas of legalization. From beginning to end, it is only Riba which regulates all the transactions of the capitalist Muslim banks.
The fourth reason Albaraka Bank advances for the permissibility to trade in haraam shares is:
“The permissibility has opened a wide scope for Islamic banking world wide, and this is presently being a form of Da’wah of the message of Almighty Allah.”
Indeed Albarakah Bank has descended into the depths of moral decadence by dragging the glorious Name of Allah Azza Jala and the sacred institution of Da’wah and Tableegh into its sordid mess of haraam riba dealings. Men of these banks who have no respect for the Ahkaam and institutions of the Deen dare speak of Allah Ta’ala and Da’wah.
You phone the bank to transact a deal and you have to commence with zina. The first thing that happens is to hear a female whispering into your ear. They speak of Da’wah and Allah Ta’ala while they flagrantly disregard Allah’s Hijaab laws. The muftis who support these evil banks lack the very basic Islamic decency and shame when dealing with these miscreants. They refrain from vital and fardh naseehat. They will not admonish the modernist capitalists in issues of moral turpitude which are flagrantly perpetrated. These muftis sit together with the females, savouring their eyes, tongues and ears, with the looks and voices of the females whom the Muslim entrepreneurs employ in attempts to seduce customers and the bosses in exactly the same ways as their kuffaar counterparts do. The mufti saahibaan should hang their heads in shame.
Just what Da’wah stems from the riba deals of the banks? The Message of Allah declares that riba is haraam. But the shaitaani ‘da’wah’ transactions of the banks are contaminated with riba. This argument of Albaraka Bank is like a person priding himself with having made wudhu with urine. There is absolutely not even a semblance of rationality in this ludicrous averment which a brain driven to insanity by shaitaan’s touch has advanced as a reason for legalizing riba on the fallacious basis of mismanipulation of Shar’i principles and ‘maxims’. What a stupid reason for an attempt to legalize haraam!
The fifth corrupt reason tendered by Albaraka Bank for the view of permissibility of the modernist muftis and sheikhs is:
“This is instrumental in providing Islamic banks with an alternative for short term investments.”
Firstly, Albaraka Bank and other banks of its ilk are not ‘Islamic’ by any stretch of imagination in the same way that a tatter shall or bottle store owned by a Muslim cannot be ‘Islamic’. Muslim ownership does not necessarily make an institution Islamic. If legalization of riba and haraam will provide an alternative for short term investment, it is not a ground for permissibility of what Allah has made impermissible. The Shariah does not issue a licence for legalization of haraam and riba to satisfy the need of the banks for short term investment.
The five ‘reasons’ presented by Albaraka Bank for its preference of the view of permissibility are all utterly baseless. These ‘reasons’ are devoid of Shar’i substance and are not at all grounds for making a choice between two opposite views – between halaal and haraam. Such a choice can be made by only properly qualified Ulama on the basis of Shar’i dalaail, not the type of stupid and insipid arguments motivated by the percuniary interests of the bankers whose prime concern is only to make money by hook or crook in ways which may be even haraam.
ALBARAKA BANK’S ‘FATAWA’
In a truly ridiculous averment, Albaraka Bank states:
“The Fatawa of Albaraka’s 6th Islamic Economic Seminar (6/5) on purchase of equities in Joint Stock Companies with lawful objectives but which occasionally deal with usury by way of extending, or seeking loans. The opinion of the participating fuqaha (sic!) appears to be in favour of purchasing such stocks.”
Our advice to Albaraka Bank is to revert to Hadhrat Mufti Taqi Saheb to ask him for the meaning of the term ‘fuqaha’. Albaraka is blissfully ignorant of the meaning of Fuqaha. The participants of the ‘economic seminar’ of Albaraka Bank are not Fuqaha. Albaraka Bank does no possess even an idea of the meaning of Fuqaha. The age of the Fuqaha has terminated a thousand years ago.
Inspite of the participation of the assumed ‘fuqaha’ in a seminar organized for Albaraka Bank’s pecuniary aims, Albaraka still has no clear direction, hence it is constrained to say “appear to be in favour of purchasing such stocks” — haraam stocks! Despite the participation of a galaxy of modernist ‘fuqaha’, no clear direction—no categoric ‘fatwa’ was forthcoming, hence the bank is constrained to proclaim the permissibility view with misgiving and uncertainty.
A disease of the nafs from which all modernists suffer chronically is to rush into the skirts of taqleed of liberal sheikhs when the ‘fatwas’ appear palatable and serve the desired interests. Hence, the modernist capitalists of Albaraka Bank are quick to cite ‘fatwas’ of sheikhs in its attempt to bolster its riba dealings. Feeling snug with such fatwas, the Bank states:
“The said memorandum permits investment in these equities. The Shariah boards of the following (5 riba-capitalist banks) adopted the view of those who argue for permissibility.”
Firstly, the so-called ‘shariah boards’ of the riba-banks have no Shar’i credibility. The members of these boards have worldly interests with these banks, hence they will sit together in settings and scenarios which advocate even zina of varying degrees. Secondly, the adoption of the banks of the view of permissibility is simply a natural choice of those whose job it is to manufacture money by legalizing the prohibitions of Allah Ta’ala. Thirdly, let it be known that the baatil fatwas of the liberal sheikhs and muftis hold no water in the Shariah. In this regard, this Ummah is constrained to heed the following warning of the Qur’aan in its castigation of the Ulama of Bani Israaeel:
“They take their Ahbaar and their Ruhbaan as gods besides Allah.”
It was the accursed practice of the sheikhs and muftis of Bani Israaeel to do what the modernist and liberal sheikhs and muftis of our age are doing. They legalized haraam to gain the favour of the wealthy capitalists and to gain worldly contributions for their pet projects and for themselves from those whose desires they upheld with their corrupt fatwas. These liberal learned men have opened up a miserable avenue of baatil ta’weel (false interpretation) to gain the favour of the wealthy capitalists. Hadhrat Haaji Imdaadullah (rahmatullah alayh) speaking on the subject of this type of interpretation said: “They have opened up such a wide portal of interpretation through which several elephants can pass together.” So wide and terrible is this doorway of baatil ta’weel initiated by the liberal muftis and shaikhs that a number of ‘elephants’ can go through all at once, not in single file.
SHARIAH SUPERVISORY BOARD?
About its ‘shariah’ board, Albaraka Bank states:
“It is made up of a team of Islamic legal scholars…………the boards role is to ensure that the fund is in compliance with the letter and the spirit of Islamic investing.”
Neither do Albaraka’s business activities comply with the letter nor with the spirit of Islam. On the contrary, the entire operation of the Bank is in compliance with the letter and spirit of the kuffaar capitalist economic system as is quite apparent from the methodology it has adopted when granting credit facilities to clients, and when it claims payment from clients who may have become involved in financial difficulties. There is absolutely no difference between these Muslim-owned banks and the non- Muslim banks in all their activities.
What brand of “Islamic legal scholars” does Albaraka Bank have in its employ? The obligatory duty of Islamic scholars is to uphold the Institution of Amr Bil Ma’roof Nahy Anil Munkar (Commanding righteous and prohibiting evil) in every sphere of the Deen, not only in the financial department. The moral (Akhlaaqi) sphere is a vital component of the Shariah. Instead of admonishing the modernist owners of the bank and applying pressure on them to refrain from employing female staff—a purely lewd practice of the kuffaar—the molvis who constitute the bank’s so-called shariah supervisory board, participate in haraam acts along with the modernist capitalists of the bank.
These molvis cannot honestly plead ignorance for their condonation of the practice of female employees and receptionists at the bank. Surely they must be aware of the famous Hadith in which Rasulullah (sallallahu alayhi wasallam) stated with great clarity that the various organs of the body commit zina. Thus, the ears, the eyes, the hands, the heart, etc., all commit zina when they become involved with females for whom observance of Hijaab is imperative—Waajib. Yet they freely intermingle and interact with the female staff, no purdah whatsoever being observed.
Every client has to suffer the spiritual and moral calamity of having to speak with female receptionists. Muslim clients of these banks have complained to us in this regard and have voiced surprise, not because of the employment of female staff by the modernist fussaaq bank owners, but by the flagrant approval for this practice offered to the bank by the molvis – by the so-called “Islamic legal scholars” of the so-called “Shariah Supervisory Board”. They have truly abdicated their office of molwiyyat and have assumed the despicable role of the ulama-soo’ of Bani Israaeel of bygone times.
When learned people – “Islamic legal scholars” – show absolutely no regard for the Qur’aanic commands of Hijaab, what confidence can anyone repose on them in matters of monetary concern, especially when they constitute cogs in the riba enterprise of the Muslim capitalists?
When Hadhrat Umar (radhiyallahu anhu) was on his way to take possession of the City of Jerusalem, he halted at a place called Jabiyyah. In an address to the Sahaabah and other Muslims who had assembled to welcome the illustrious Khalifah, Hadhrat Umar (radhiyallahu anhu) said:
“O People! Reform your souls (your characters), then your outward actions will become (automatically) reformed……Practise for your Aakhirah, and your mundane affairs will be seen to……….Never ever be alone with a woman, for verily, the third one present is shaitaan.”
Sayyiduna Umar Ibn Khattaab (radhiyallahu anhu), the Second Khalifah and Ruler of the Islamic Empire was on his way to take political possession of an important prize city and to annex it to the Islamic Empire. Yet, his address to the Sahaabah and the Mujaahideen emphasised the moral aspects of the Deen, among which he singled out for mention the strict observance of purdah and to scrupulously avoid being together with females. The illustrious Khalifah did not fail in his duty of Amr Bil Ma’roof. His political preoccupations and the responsibility of the Khilaafate did not make him indifferent to the morality of the Ummah.
But the molvis of the bank’s ‘shariah board’ in their air-conditioned offices with hardly any work to do, cannot find the time nor the enthusiasm to admonish their paymasters who indulge in acts of moral turpitude – total and flagrant violation of the Qur’aan’s Hijaab Ahkaam.
Muslims cannot place any reliance on a board of so-called “Islamic legal scholars” who show scant regard for the ahkaam of the Shariah which they pretend to expound. Their prime function is to search the kutub of the different Math-habs to dig out some detail on the basis of which impermissible acts could be made permissible to gain the favour of their capitalist bosses.
They have no other function but to formulate legless ‘proofs’ by the method of baatil ta’weel to render halaal the haraam activities of the capitalist bank operators These boards of ‘Islamic legal scholars’ are not viable Shar’i institutions. They are the handmaids of the entrepreneurs to aid them in the achievement of their monetary goals. And, the prime method of these boards is to fabricate only such fatwas which render haraam into halaal.
THE JOINT STOCK COMPANY
The modernists and pro-western capitalists in the Muslim community are always at pains to convince Muslims that the joint stock company is exactly like a Shar’i Shirkat (Partnership). Inspite of their strivings to prove their point and the employment of baseless interpretation, they have failed in their exercise. The simple reason for their failure is that the joint stock company is plainly not a Shar’i partnership.
Albaraka Bank has been constrained to concede this reality, albeit grudgingly. In order to justify investment in such ventures, Albaraka’s brochure states:
“Shariah scholars mentioned that the joint stock company is basically different from a simple partnership. In a partnership contract the actions and dealings of each partner is (are) attributed to each other by way of agency. But in the joint stock company the majority rules, therefore the majorities (majority’s) choice cannot be attributed to the individual’s disapproval (approval!).”
This statement is a candid admission of the claim that joint stock companies are not valid partnership enterprises in terms of the Shariah. Since the joint stock company is basically different from a simple Shar’i partnership, then what exactly is a ‘joint stock company’ in terms of the Shariah? In which category of dealings does the company fit? It is basically different from Islamic Shirkat, hence it is never a valid Shar’i partnership.
Albaraka Bank has been constrained into this admission in its attempt to justify investment in joint stock companies which invest in interest bearing accounts to earn riba. The bank then presents its understanding of ‘legal maxims’ to achieve the trick of transforming haraam money into halaal. But, it is haraam for the Muslim Bank to invest in such businesses in the first place. The “legal maxim” which states the transformation, is entirely another issue as has been explained earlier in this booklet. That principle does not legalize participation or investment in any riba institution to earn contaminated money.
The legal principle applies in a different situation. It is not a licence for investing in a riba business. This has already been explained in detail.
The evil gymnastics with ta’weel-e-baatil has culminated in a shameless acceptance of haraam. Albaraka Bank states in its brochure:
“The percentage of non-halaal income in the income statement must not exceed 10%. Income from interest bearing accounts and non-halaal investments in total divided by total income (mark the gymnastics!) must not exceed 10% If the (haraam) income exceeds 10% then such an investment will not be permissible. The purification process must be adhered to if the fund earned 10% or less of income from non-halaal activities.”
From whence did Albaraka Bank acquire the 10% limit? Has Albaraka become the divine lawmaker?
The logic displayed by the Bank here creates the notion that to invest in a haraam venture is permissible provided that the haraam income does not exceed 10% of the total income of the investor. The implication, in fact categoric claim, of this statement is that it is permissible to invest in a haraam business and earn haraam riba income as long as the haraam income is 10% or less in relation to the halaal income acquired from the other investments.
There is no basis for this conclusion in the Shariah. It is downright stupid and false to aver that if the percentage of haraam income does not exceed 10%, then such investment is lawful and if it exceeds 10%, it is unlawful. From where did they obtain this ludicrous ‘fatwa’?
It is haraam to invest in an institution which pays haraam returns regardless of the percentage relationship which such haraam riba has with other halaal income. Truly, this type of logic and conclusion are the effects of brains deranged by the touch of shaitaan as the Qur’aan Majeed states.
Pursuing this corrupt and utterly baseless line of reasoning, Albaraka Bank avers
“The non-halaal investments must not exceed 30% of the company’s total market capitalization.” ………The ratio of 30% is prescribed due the fact that it is less than 1/3, and 1/3 has been declared abundant in the Hadith of our beloved Muhammad (S.A.W.). (Bukhari & Muslim).”
The bank dithers between 10% and 30%. The ‘ijtihad’ of the bank has failed to present a uniform principle to regulate its investments to earn haraam riba. In one instance 10% haraam earnings render the investment unlawful, while in other instances it is one third. This confusion is the consequence of the type of satanic insanity which according to the Qur’aan Majeed applies to those who indulge in riba.
This is truly rotten ‘ijtihad’ of the juhala (ignoramuses). Albaraka Bank or its decrepit and incompetent ‘shariah supervisory board’ consisting of so-called ‘Islamic legal scholars’, has attempted to formulate a new principle of Fiqh based on a Hadith which has absolutely no relevance to either the issue of legalizing haraam nor to the formulation of a principle. This silly ‘ijtihad’ of unqualified men has proposed a new ‘principle’ which has not existed in Islam for the past fourteen centuries. In its stupid ‘principle’ Albaraka Bank avers that it is permissible to earn haraam income as long as the unlawful earnings are less than one third of the total of one’s halaal income. The basis for this new fangled ‘principle’ in Albaraka’s opinion is a Hadith in which it is mentioned that one third is much or abundant.
The Hadith to which Albaraka Bank refers pertains to the issue of inheritance. A Sahaabi had asked Rasulullah (sallallahu alayhi wasallam) if he should bequeath two thirds of his wealth to Sadqah. Rasulullah (sallallahu alayhi wasallam) refused permission for this and advised one third, adding that one third is much.
This Hadith has no relationship with haraam earnings. Not a single among the Fuqaha since the inception of Islam had ever utilized this Hadith or any other Hadith to formulate the principle which Albaraka’s corrupt ‘ijtihad’ has produced. There is no principle in the Shariah which allows the earning of haraam money on the basis of it being less than one third or more precisely 30% (according to the tin-plated modernist mujtahids), of the total of one’s halaal earnings.
The 30% ‘principle’ is a fraud fabricated in the name of Rasulullah (sallallahu alayhi wasallam) by the ignorant modernist ‘mujtahids’. About such falsehood, Rasulullah (sallallahu alayhi wasallam) said: “He who alleges falsehood on me, should prepare his abode in the Fire.”
In the Hadith in question, Rasulullah (sallallahu alayhi wasallam) mentioned that for the purpose of making a bequest to charity, the testator should not exceed one third of his total wealth since one third was much and adequate. The rationale for this decision was clearly mentioned by Nabi-e-Kareem (sallallahu alayhi wasallam). In ordering the Sahaabi not to exceed one third, Rasulullah (sallallahu alayhi wasallam) said: “It is better that you leave your heirs wealthy than in a state of poverty which will constrain them to beg from people.”
It is the height of ignorance and shaitaan-induced insanity (Qur’aanic epithet) to infer from this Hadith permission to earn haraam wealth as long as it is 30% of the halaal wealth which is earned elsewhere. The Hadith has been ludicrously used to override the Qur’aanic and Hadith prohibition of riba in particular, and haraam earnings in general.
This stupid ‘principle’ effectively means that a Muslim is allowed to gamble, indulge in riba and other haraam business activities to earn haraam money as long as the ration of 30% is observed. The brains which have spawned this haraam principle are truly lamentable. The bank should present substantiation from the Fuqaha and the Books of the Shariah for its ‘principle’ which it has clearly sucked out from its thumb.
If the 30% claim is a Shar’i principle, it should have uniform application in all Shar’i issues. Consider the example of a mixture of gold and a base metal. According to the Shariah if the alloy consists of 49% base metal and 51% gold, the whole alloy (100%), will be regarded as gold, and Zakaat has to be paid on it. If the one third ‘principle’ of abundance has to be accepted, it will follow that the whole alloy should be regarded as a base metal exempted from Zakaat. But the Shariah does not employ any such ‘principle’ to decide the nature of the mixture of metals. The principle of predominance is employed. Since gold is the dominant component of the mixture, the whole is regarded as gold. Here one third is not considered to be ‘abundant’, hence the alloy is not classified as gold inspite of 49% being gold- far in excess of one third.
The Shar’i principle governing the transformation of haraam money (not haraam employment or haraam investment or haraam business), is known as Istihlaak which states that if tangible haraam money is mixed with tangible halaal money, and the halaal amount is predominant, more than 50% – the principle mentioned above – then the homologous whole will be regarded to be halaal. But at the same time it remains incumbent to purify the money by giving to charity the haraam amount. Since the coins have become indistinguishable due to the admixture, any coins to the amount of the haraam sum, may be given away to secure release from the obligation.
There is no one third principle operating here or in any other transaction to render haraam lawful. The one third mentioned in the Hadith is a straightforward mas’alah pertaining to the issue of making a bequest for the time after Maut. It has never been utilized to formulate a principle. Leave alone a principle for legalizing haraam activity.
THE HADITH OF ONE TENTH HARAAM
It would have been more appropriate for Albaraka’s artificial ‘mujtahids’ to have formulated a principle on the basis of the Hadith which states that Salaat performed with a garment purchased with nine tenths halaal money and one tenth haraam money is unacceptable to Allah Ta’ala. In this Hadith one tenth (not one third) is sufficient to contaminate the whole.
According to the methodology of Albaraka’s ‘ijtihad’, the principle which is deducted from this Hadith states: One tenth haraam renders the whole haraam. Hence, 100% of Albaraka Bank’s income is ‘haraam’ on the basis of this ‘principle’ which can be formulated on the basis of the aforementioned Hadith in terms of the logic of the ‘ijtihad’ of the riba-capitalists.
It can be correctly observed that morally all the income of the Bank is contaminated since the haraam component of the total wealth far exceeds 10%. The bank advocates a maximum of 30% halaal for the overall lawfulness of its income.
It should be understood that the one tenth mentioned in the Hadith is not a mandatory minimum requisite for rendering the whole contaminated. Even less than one tenth haraam will likewise contaminate the whole in the same way as one drop of urine contaminates a full bucket of water. Ill-gotten earnings are haraam regardless of the small quantity. The mention of one tenth in the Hadith does not imply that one twentieth or 5% riba is halaal.
A grave misconception of the ‘mujtahids’ of Albaraka’s ‘shariah board’ is their understanding that the principle of Istihlaak of tangible money—the coins and the notes—by admixture, can be extended to haraam investment or earning haraam money. This misconception has constrained Albaraka Bank to advocate shamelessly participation in haraam business ventures, and to invest in businesses to earn riba. This attitude attempts to create the perception that the Shariah permits and give a free licence for making investments in haraam ventures and to earn riba as long as the amount is small in relation to the total income. But this is totally and blatantly false.
A SHOCKING RIBA TRANSACTION
The following glaringly haraam transaction more than adequately highlights the riba backbone of Albaraka Bank and similar other banks which lay vociferous claim to being models of ‘Islamic’ banking.
A client applied for financial assistance to Albaraka Bank for the purchase of a fixed property. Responding to Zaid’s application, Albaraka Bank wrote:
“We have pleasure in confirming that this Bank has approved a Murabaha (sic) facility of ONE MILLION FOUR HUNDRED AND THIRTY FOUR THOUSAND RANDS (R1,434,000.00) to assist you with the purchase of the property referred to in your application.” Normally, in a Murabah transaction the Bank would purchase the property from the registered owner at a certain price and then resell it to you at a profit. However, whilst we are satisfied that this Murabah facility is in conformity with the Shariah, in view of the practical difficulties involved and the substantial additional costs due to the applicability of the laws of the Republic of South Africa, we confirm that you may conclude arrangements with the registered owner and sign any documents necessary for the transfer of the property directly into your name.
The terms and conditions of the facility are as follows: AMOUNT OF FACILITY Cost R760,000.00 ABL Profit R674,000.00 Selling Price R1,434,000.00”
THE OBJECTIONS OF THE SHARIAH
In a brazen attempt to fool itself and to soothe the client who at the time was desperately in need of the finance to purchase the property, Albaraka Bank, set up the abovementioned stratagem which it deceptively labels ‘Murabaha Facility’.
Apart from the Hindu money-lenders of India who gobble up the lands of poor unfortunate, ignorant Muslim peasants who happen to suffer the colossal calamity of becoming entwined in the riba tentacles of these monsters, we know of no other bodies, private persons or financial institutions, which charge the whopping sum of almost 100% interest on a loan. In the case under scrutiny, Albaraka Bank charged the client R674,000 (Six hundred and seventy four thousand rands) riba on a loan of R760,000 (Seven hundred and sixty thousand rands). No amount of desperate wriggling and manoeuvring will be able to save the soul of this riba institution from the charge that it is guilty of being the institution which charges the highest usury in the world – riba marketed under the label of ‘Murabah Facility’. By which device of interpretation has Albaraka Bank legalized this huge sum of riba, is known to Allah Ta’ala Alone.
The transaction never was a Muraabahah deal. In a Muraabah deal, a man sells his own property. Without a property belonging to one, the question of a sale and a Muraabaha deal simply does no arise. The explanation about the deal ‘conforming with the Shariah’ and “the practical difficulties” related to the “laws of the Republic of South Africa”, are errant bunkum presented in an endeavour of self-beguilement and to present a ridiculous veneer to cover up the noxious stench of riba which this deal emits.
The fact of reality is that Albaraka NEVER purchased the property. It granted the client an outright loan on which it charged almost 100% interest. The Bank concedes in its letter that it had acted in contravention of its “normal practice of purchasing the property from the registered owner”. Instructing the client to take transfer of the property directly into his name does not elevate Albaraka Bank to the status of ownership. The stark truth is that Albaraka advanced the client a loan of cash (R760,000). The client utilized the greater part of this loan to pay the outstanding balance owing on the property. Albaraka levied on this loan interest to the tune of R674,000.
According to the Shariah, Albraka’s farcical ‘Murabaha Facility’ transaction is a haraam riba deal. The following explanation of the deal provided by the client further confirms the fallacy of the ‘Murabaha Facility’ claim of Albaraka Bank:
“A Close Corporation (CC) purchased a property comprising a block of flats for R930,000. The members of the CC paid a deposit of R230,000 on behalf of the CC to the seller and Albaraka Bank (AB) paid an amount of R700,000 to the seller in respect of the balance of the purchase price, plus also advanced an amount of R60,000 to the CC for repairs, renovations and improvements to the property. A Murabaha agreement was signed whereby the CC was to pay AB the capital of R760,000 plus so-called profits of R 674,000 giving a total of R1,434,000.”
The facts of the case thus are as follows:
? The client (the CC) initially purchased the property.
? The purchase price agreed on by the buyer (the CC) and the seller is R930,000.
? The CC paid a deposit of R230,000. It required a further R730,000.
? The CC applied to Albaraka Bank for a loan to pay the outstanding balance on the property. The Bank granted the loan.
? In addition to the R700,000 required to pay the balance of the purchase price, the CC required a further R60,000 for renovations. This loan too was granted by the Bank.
? Albaraka Bank then pretended that the R700,000 advanced to pay the balance of the purchase price, plus the R60,000 given for renovations constituted the ‘price’ of a fictitious building which it had ‘purchased’ in its imagination. Stating this figment of its imagination on paper, the Bank brazenly – without fear for man or Allah – lists the cost price of the building which was bought by the client (the CC) as being R760,000. But the price was R930,000 of which the clients themselves paid R230,000 directly to the owner of the building. The paper purporting to be a ‘Murabaha Facility’ can never conceal the villainy and hurmat of this plain riba transaction.
THE RULING OF THE SHARIAH
The ruling of the Shariah pertaining to the aforementioned riba transaction is that the Bank has to compulsorily refund the client the sum of R674,000. This amount is haraam money in the Bank’s coffers. It belongs to the clients (the CC). It cannot be given to charity because the clients are still alive and not missing. And if they are missing, their heirs are very much alive and looking ravenously at the large sum which the Bank had acquired from the clients under the baseless guise of ‘Murabaha Facility’.
RIBA COMPOUNDED WITH RIBA
In its fallacious ‘Murabah Facility’ agreement, Albaraka Bank stipulates:
“Registration of a first Mortgage Bond over the property described as…………………….in the sum of R1,434,000 plus a contingency sum of R287,000 in favour of Albaraka Bank Limited.”
What is this additional haraam riba ‘contingency sum of R287,000’ payable on the already huge sum of R634,000 riba? The Bank has some explaining to do.
Another haraam riba stipulation reads:
“In the event of the Purchaser (sic) failing to make payment of any amount/s due and payable in terms of this agreement, the Purchaser promises / undertakes and binds himself / itself to pay to the Bank a penalty / penalties within 30 days of the date of default calculated at the rate of nought comma one percent (0,1%) per day, during the period of default, on the amount/s overdue from the due date/s of payment thereof to the actual date/s of payment thereof.”
This ‘penalty’ charge is a glaring riba charge portrayed as a ‘charity’ charge by those whose hearts have become desensitised as a consequence of devouring riba. We have published two booklets on this haraam riba-penalty. Whoever is interested to study this question, may write to us for the two booklets on riba-penalty.
The spiritual insanity and intellectual derangement of those who devour riba are conspicuously confirmed by the fact that a massive riba charge of R634,000 on a R760,000 loan fails to satiate their pecuniary cravings. Thus, they come within the full glare of the Qur’aanic castigation:
“Those who devour riba do not stand except as one who has been driven to insanity by the touch of shaitaan.”
Now when the clients are in financial stress and cannot meet their commitments, the Bank conducts itself with Yahudi attitude and instituted legal action. The clients (the CC) contends:
“Despite all reasonable attempts by the CC and its members imploring AB to resolve the matter amicably and give sufficient time to reschedule payments or find alternative buyers, AB has proceeded with legal action relentlessly applying undue pressure.”
It is haraam for Albaraka Bank to utilize Qur’aanic verses and moral precepts of the Shariah such as Qardh Hasan and Islamic Brotherhood to promote and sell its riba products. It lacks the faintest idea of the Qur’aanic concept of a Beuatiful Loan and Islamic Brotherhood. When it comes to money, the devourers of riba throughout the world will truly succeed in squeezing blood from stones. That is because the Qur’aan says that they are “driven to insanity by the touch of shaitaan.”
All those who have suffered the misfortune of dealing with these so-called Islamic Banks, only begin to realise the villainy of the riba-operators when they apply the pressure of the kuffaar legal institutions to suck out the riba from clients reduced to penury under the satanic yoke of haraam riba.
NOTICE TO THE BANKS
Albaraka Bank as well as other Muslim banks of the same ilk should take note of the Qur’aanic ultimatum and declaration of war on those who deal in riba. These banks have two options: Either to set their houses in order by bringing their operations and products fully within the confines of the Shariah, or to close up shop and branch off into some halaal avenue in the pursuit of their rizq.
Albaraka Bank has attempted to pass off its products as halaal on two grounds:
(1) That trading in shares of joint stock companies is lawful.
(2) That the Shariah allows investment in haraam businesses to earn haraam money, primarily riba, provided that the amount is small and that it will be ‘purged’ by giving it to charity.
Both these contentions are fallacious. Shares, as has been explained in this booklet, are haraam. The joint stock company is not a valid Shar’i partnership (shirkat) enterprise. Buying and selling shares is not permissible. Buying and selling unit trusts are likewise not permissible. The dividend earned is haraam riba. Investing in these Muslim-owned banks is not permissible.
“Those who devour riba do not stand except as one driven to insanity by the touch of shaitaan.” (Qur’aan)
THE INSANITY CREATED BY RIBA
“Those who devour riba do not stand except as one who has been driven to insanity by the touch of Shaitaan. This is because they say: ‘Verily, trade is like riba while Allah has made lawful trade and made riba unlawful.” (Surah Baqarah, aayat 275)
The so-called Islamic banks intransigently refuse to set their house in order. This intransigence is the product of the shaitaani insanity mentioned in the aforementioned Qur’aanic verse. It is a simple issue for these banks to restructure their transactions with only a little effort.
It is a simple matter to bring their trade transactions fully within the bounds of the Shariah if they are truly concerned about the Deen of Allah Ta’ala and if they can bring themselves to understand the vital need for Halaal income. The Muslim community will be only too happy to deal with Muslim banks if they streamline their affairs to conform with the Shariah. Presently, they are employing deception by their utilization of Islamic terminology for deals which are 100% replicas of the transactions of the riba capitalists.
The Muslim-owned banks, contrary to their claims, do not purchase any tangible commodities (maal). The claim they tender in this regard is a massive falsity and deception. They do not deal in maal. They deal in only finance – money. They sell money, and their ‘profit’ is pure riba. Their thinking ability has been affected and deranged by the shaitaani produced insanity because they intransigently persist with the fallacious claim that their riba dealings are halaal trade. Just as the mushrikeen of Arabia had intransigently insisted that their riba was like trade, so too do these banks claim.
These banks will be able to comply with the Shariah only if they agree to think along Islamic lines. But they plot all their dealings in strict accordance with the riba procedures and methods of the kuffaar capitalists right down to the finest detail.
Their so-called shariah boards act as mere rubber stamps for all the un-Islamic and riba transactions fabricated by the banks. The shariah boards are despicable subterfuges providing ‘legality’ for the riba contracts and agreements. Since these boards are directly associated with the banks and the molvis and sheikhs serving on these boards are employees of the banks, they (the molvis, muftis and sheikhs) are incapable of presenting the Haqq of the Shariah. They are perennially searching for interpretations to sanctify and sanction the riba deals of the capitalist banks.
They only need to divest themselves of the riba mentality acquired from the kuffaar capitalists and figure out simple ways to ensure that their dealings comply with the Shariah. This is neither an insurmountable nor a difficult task. It is their intransigence and their determination to follow the riba path of the western entrepreneurs which induces them to believe that banks in this age cannot operate if run strictly according to the Shariah. This mentality is the consequence of the shaitaani insanity stated in the Qur’aan.
If they obstinately refuse to bring their house in order to comply with the Shariah, let them then take notice of the Divine Ultimatum. The Qur’aan issues the following declaration of war to the riba capitalists:
O People of Imaan! Waive (leave off) what remains (for you) of riba if indeed you are Mu’mineen. And, if you do not do so, then take notice of war from Allah and His Rasool. And, if you repent (and abandon your riba demands), then for you is your capital amount (which you had given as a loan). Do not commit oppression and you will then not be wronged.” (Surah Baqarah, aayats 278 and 279)
Compliance with the Qur’aan requires a complete waiver of all interest which the bank demands under guise of its ‘penalty clause’. All riba agreements have to be cancelled and the riba charged (finance charges, etc.) has to be compulsorily refunded to the oppressed debtors. Only then can the Muslim-owned banks be saved from the Ultimatum of War from Allah and His Rasool. This War will continue from this dunya right into the Aakhirah. If they refuse to set their house in order, they should clearly understand their loss as the Qur’aan states:
“They are losers in the dunya and in the Aakhirah.”
All Muslims know and understand that insurance is haraam even if they indulge in this riba-qimaar sin.
Albaraka Bank, in fact all Muslim-owned capitalist riba banks have incorporated insurance as a binding condition for granting finance (loans).
The insistence on insurance further testifies to the scant regard these riba banks have for the Shariah. Their primary concern is to safeguard their monetary interests even at the cost of purchasing Jahannum and the Wrath of Allah Ta’ala.
Every agreement of these banks makes insurance mandatory. This demand belies their claim of being ‘Islamic’.