Islamic Finance – Part Two


All modernists and liberals suffer from the same disease of unprincipled reasoning. Since they lack proper understanding of the operation of the Principles of the Shariah, they invariably resort to corrupt and unprincipled reasoning which is the product of their whimsical and emotional opinions which are generally bereft of the rationalism which the Shariah’s Qiyaas process demands.

When a ruling is required for an exigency or a new development which had not existed in exactitude during the early ages of Islam, the imperative and principled methodology to employ is for experienced, qualified and Muttaqi Ulama to issue the ruling on the basis of the Principles of the Shariah, not on the basis of the permissibility of consuming a minimum amount of swine’s flesh when one is on the verge of death due to starvation. The permissibility of pork consumption is formulated on principled basis – on solid Shar’i Daleel.

The permissibility of consuming pork, for example, is not based on the Hadith which allowed certain people to consume camel’s urine as a cure for their diseases. The permissibility is based on principles of the Shariah. After a process of principled reasoning, the Hukm of permissibility is issued.

The Shar’i Dhururat has to be firstly established and proved. When the genuine need has been conclusively established, then the ruling will be based on the principle of the Shariah applicable to the exigency in the relevant context.

As far as Bay-ul-Wafa’ is concerned, it is not among the Usool (Principles) of Fiqah. It is not a principle on which permissibility for another contingency or development could be based. Bay-ul-Wafa’, as will be shown later, Insha’Allah, itself is a haraam and baatil transaction which a small minority of the Mutakh-khireen Ulama (those who had appeared from the 5th Islamic century) had ruled to be permissible based on ‘need’, not ‘commercial’ need, but a genuine need of the people – a need which in their esteem was sufficient for the invocation of the principle underlying the ruling for concession.

But no such need exists today. If someone had consumed swine’s flesh because he was on the verge of physical extinction due to starvation, a general rule of permissibility of consuming pork cannot be issued citing as the basis for the desired universal ‘permissibility’ the case of the starving man.

It is therefore most unprincipled to cite an unlawful transaction legalized on extremely flimsy grounds by a minority of the later-day Ulama, for the purpose of using it as a stratagem to legalize uncalled for and unneeded faasid trade deals of the capitalist riba banks.

On the issue of the corrupt Bay-ul-Wafa’ transaction, Mr. Omar has selected out of nine different views, the one which suited his liberal palate. And, this selection was executed by him for the sole purpose of finding accommodation for the western riba capitalist system in the Shariah.


The existence of numerous (nine) different views on the nature of Bay-ul-Wafa’ suffices for its discardence. However, despite the confusion, ambiguity and differences on this issue, there is consensus on two aspects relating to this deal:

“Bay-ul-Wafa’ is considered to be either Rahn (Pawning) as some (Ulama) have said, or Bay-e-Faasid (corrupt/invalid sale) as other Ulama have said.” (Khaaniyah, Vol. 2, page 171)

While Mr. Omar swiftly and conveniently cites Fataawa Khaaniyah on the ‘promise’ issue, he overlooks, or perhaps is blissfully ignorant, of the verdict stated in Khaaniyah (as above) on the baatil Bay-ul-Wafa’ deal.

According to those Ulama who aver that it is Rahn, all the rules of Pawning will be applicable. This is confirmed with clarity in the Fiqh books, including Fataawa Khaaniyah. According to those who aver that Bay-ul-Wafa’ is a Faasid Bay’, all the ahkaam of corrupt/invalid sales will apply.

In view of this categoric ruling based on the Principles of the Shariah, Bay-ul-Wafa’ should be buried and not exhumed from its grave, and then ludicrously present the decomposed skeleton as if it is an Asl (Principle) of Fiqah.

In the maze of confusion surrounding this corrupt transaction, Mr. Omar has overlooked the following ruling also stated in Khaaniyah from which he has extracted his imagined ‘principle’ of the legal enforceability of a promise which in reality belongs to the moral domain according to the Shariah. On page 307, Vol. 2, Khaaniyah states:

“A man rents his house to someone, then he sells it to another person. The new owner now collects the rent. He (the new owner) has promised the seller of the house that when he (the seller) refunds his money (the price he had paid), he (the buyer) will then return the house to him, and he (the seller) can also deduct from the price all the rent he (the buyer — the so-called new owner) had collected. After some time the ‘seller’ comes with the money (to claim the house). He now intends to deduct the amount of the rent (which the buyer had collected and had promised to make over to him by deducting it from the price). In this regard the Ulama said: “The seller may not deduct it (the rent collected by the buyer) from the price. The statement which the buyer made to the seller, namely, that he may deduct it from the price when the house is returned, was a promise. Hence, its fulfilment is not incumbent (or enforceable) legally. If he fulfils it, it will be good, otherwise there is nothing (no claim) against him. If they had stipulated this as a condition in the sale contract, then it would have rendered the sale faasid (corrupt and invalid).”

In this example of Bay-ul-Wafa’ it is explicitly mentioned that a promise is not legally enforceable. In fact, it is made clear in the aforementioned example that fulfilment of this type of promise is not even morally incumbent, hence it is mentioned: “If he fulfils it, it will be good”. Despite the ‘bilateral promise’ made here, Khaaniyah states that its fulfilment is not even morally incumbent. This is in diametric conflict with Khaaniyah’s statement in another example of Bay-ul-Wafa’ where it is mentioned that fulfilment of the promise is incumbent.

To eliminate the incongruity and contradiction, the term laazimah (incumbent) should be interpreted to mean morally incumbent. It will then conform with the Shariah’s moral ruling pertaining to promises. Furthermore, should it be assumed that in the specific example mentioned in Khaaniyah, the meaning of incumbent is ‘legally enforceable’, then there is no incumbency to accept this interpretation or meaning since it is in conflict with the established tenet of the Shariah pertaining to promises. It also represents a faasid condition which corrupts the sale. It is furthermore, in conflict with the Asl Math-hab.

Mr. Omar thus has no valid grounds for having made the selection of this specific corrupt transaction which embodies two faasid elements:

(1) A faasid condition, namely, the ‘buy-back’ condition.

(2) Legal enforcement of a promise which according to the Shariah is NOT legally enforceable. Let us now examine the Fataawa of our immediate Akaabireen on Bay-ul-Wafa’.


(1) Hakimul Ummat Hadhrat Maulana Ashraf Ali (rahmatullah alayh), while acknowledging that according to some Muta-akh-khireen Fuqaha, Bay-ul-Wafa’ is permissible because of a need which they had perceived, states about this type of sale:

“A contract, the intent of which is Rahn and the external form of which is Bay’ is called Bay-ul-Wafa’. According to the Principles of the Math-hab this (i.e. Bay-ul- Wafa’) too is Rahn. It is haraam (for the buyer/pawnee) to derive any benefit from it (the ‘sold’ object). (Assuming) it to be a Bay’, then because of the (faasid) condition it is a Bay’ Faasid, hence haraam.” (Imdaadul Fataawa, Vol. 3, page 107)

“According to the Asl Math-hab, the transaction is faasid.” (Imdaadul Fataawa, Vol. 3, page 108)

(2) Fataawa Daarul Uloom Deoband states:

“There is considerable difference of opinion among the Fuqaha on the issue of Bay-ul-Wafa’. According to some it is Rahn and according to others it is Bay’…If the condition of return (i.e. the ‘buy-back’ condition) is made at the time of the sale or stipulated in the contract, then it will be Bay’ Faasid. If the condition is made after conclusion of the transaction, then the sale is proper. In this case (i.e. after conclusion of the sale) the condition is a promise which does not corrupt the transaction (since it was made after termination of the sale).” (Vol. 8, page 20)

(3) “Question: Is it permissible to buy something on condition of returning the item to the seller when he returns the amount which was paid?

Answer: If this condition is stipulated in the transaction or before the transaction or if the parties do not consider the transaction binding, then this will be a Bay’ Faasid (corrupt/invalid sale). If the promise is made after conclusion of the sale, the sale is valid, and it is necessary to fulfil the promise.” (Ahsanul Fataawa, page 507, Vol. 6)

(4) “Question: I sell my property valued at 2000 rupees for 900 rupees due to my need, on this condition that if I pay back the 900 rupees, the buyer will return my property… The buyer will derive the benefit of the property (rent, etc.) during this period. Is this sale permissible? Is it permissible for the buyer to derive benefit from the property?

Answer: According to the Shariah, this sale is not valid. It is in effect Rahn (pawning). It is not permissible for the ‘buyer’ who in reality is the murtahin (pawnee), to derive any benefit from the property. Whatever income is derived, belongs to the original owner (i.e. the ‘seller’) who in reality is the raahin (the pawner). The income will also remain pawned along with the property. When the true owner returns the 900 rupees, his property and the income will be handed to him.” (Fataawa Mahmudiyyah, page 276, Vol. 11)

(5) “Question: Circumstances compelled me to sell my house to Bakr on condition that after a year if I am able to repay Bakr, I will take back my house. Is this method permissible? Is it permissible for Bakr to use this house?

Answer: Selling with this condition renders the sale faasid (corrupt/invalid). It is on the contrary Rahn (pawning). It is called Bay-ul-Wafa’. The house will be pawned. It is not permissible for the pawnee to derive benefit (rent, etc.) from the house. The sale should be transacted without any condition. Thereafter, at another meeting, the promise of returning the house could be made. The sale will then be valid. When the money is returned within the specified time, it will be morally incumbent to return the house in view of the promise.” (Fataawa Mahmudiyyah, Vol. 290, page 297)

(6) “Question: In the presence about 15 people, Zaid who had taken the land of Amr in lieu of some money, said to him: ‘I shall return your land when you pay me 2000 rupees.’ No time period was fixed for repayment. On the contrary, Zaid had said that he could pay back whenever he wished and reclaim the land. Amr now is able to repay the amount, but Zaid refuses to give back the land. How is this possession of the land by Zaid regarded (in the Shariah)?”

Answer: If Zaid had held the land as a pawn, then it is not permissible for Zaid to derive any benefit from the land. The condition of 2000 rupees is baseless. He is entitled to take back his full right (whatever amount he had lent to Amr), and it is incumbent that he returns the land to Amr on receiving his money. However, if he had bought the land with the condition that he will return it in exchange for 2000 rupees, then this sale is faasid. It is incumbent to annul it. If the condition was not made at the time of the transaction, but made separately after conclusion of the deal, then it is morally necessary for Zaid to fulfil the promise made.” (Fataawa Mahmudiyyah, Vol. 11, page 301)

(7) “Question: Due to financial straits Zaid sells his land to Bakr who became the registered owner. Bakr farms the ground. Although the condition of returning the land (to Zaid) was not explicitly mentioned, it was implied. Is this transaction proper or not?

Answer: If there was no buy-back condition in this transaction, the sale is valid. If a verbal promise was made afterwards, its fulfilment is morally incumbent because violation of a promise is haraam. But, the sale cannot be forcibly (i.e. legally) revoked (to enable Bakr to take back the land). If the promise was in the actual transaction, then it is Bay-ul- Wafa’. Shaami has narrated several views regarding Bay-ul- Wafa’. The preferred view is that this is a sale in outward form, but in effect it is Rahn (pawning). It is not permissible for the pawnbroker to derive any benefit from the pawned item. Hence, whatever wealth has been gained during this time (of custody) should be returned (to the owner) or it should be deducted from the ‘price’ which in reality is qardh (a loan). Maulana Abdul Hayy Lucknowi (rahmatullah alayh) has written a treatise on this mas’alah. Its title is Alfalakul Mashjoon. The arguments are stated with elaboration.” (Fataawa Mahmudiyyah, Vol. 13, page 358)

(8) Explaining the invalidity of Bay-ul-Wafa’ with clarity, Hadhrat Mufti Mahmoodul Hasan Gangohi (rahmatullah alayh) states:

Question: Zaid has categorically sold his property to Bakr. Zaid requested Bakr to grant him the concession of taking back his property within a specified period of time if he (Zaid) pays back the money. Is this sale permissible according to the Shariah?

Answer: If the return of the property was not stipulated as a condition in the sale contract or by way of a promise, and the sale was contracted in the usual manner in which people daily transact sales, and at some other time and sitting, Zaid had requested Bakr for this favour, and Bakr had accepted it, then according to the Shariah the sale is valid. Now, Zaid has no right whatsoever of legally demanding the return (of the property). He cannot compel Bakr in any way whatsoever to return the property. Bakr has the full and unfettered rights of ownership of the property. If he wishes, he may dispose of it to someone by sale, gift, pawning, etc. Zaid has no right of debarring any of these operations (of Bakr). Even if Zaid wishes to pay back the money within the mutually agreed time period, Bakr has the right to return the property if he deems it appropriate and if he feels that there is nothing to impede him (from so doing). If it is in conflict with the interests of Bakr and harmful to him, he cannot be (legally) compelled to return the property. In fact, he can refuse to accept the money tendered by Zaid. In short, legally there is no obligation on Bakr. However, it is morally better to fulfil the promise. Inspite of this, if at the time of making the promise it was his intention to honour it, but later due to circumstances he does not fulfil it or there is a possibility of him suffering a loss (if he honours the promise), then according to the Shariah he is not sinful (for not fulfilling the promise). If the (buy-back) condition was stipulated in the sale contract or if prior to the sale this promise was made, then this ‘sale’ is in fact Rahn. The property will remain as a pawn. It is not permissible for Bakr to derive any benefit from the property. He may not take its rent nor can he sell it nor hire it nor pawn it nor make a gift of it. He only remains the custodian and trustee of the property. Whatever income the property yields will also remain in trust as a pawn. After receiving his money (which he had loaned to Zaid), he has to incumbently return the property and whatever income he had received..” (Fataawa Mahmudiyyah, Vol. 6, pages 286 and 287)

From the aforegoing elaboration it should be abundantly clear that:

? A promise in Islam gives rise to the moral obligation of fulfilment. However, a valid reason is acceptable in the Shariah for dishonouring this moral obligation.

? A promise does not give rise to legal consequences. A promise is not legally enforceable even if the one who promised dishonours his promise for no valid reason. The consequences of intentional violation of a promise for no valid reason is a matter for the Divine Court in the Aakhirah, not for the legal court in this world.

? Bay-ul-Wafa’ is a haraam transaction. It cannot be tendered as a basis for legalization of any trade practice.

? Bay-ul-Wafa’ is not a principle which could be utilized for the formulation of a Shar’i effect (Hukm).

? Bay-ul-Wafa’ cannot be presented as a first premise in Shar’i syllogism for the transference of a hukm (ruling) to render lawful the corrupt riba practices of the capitalist banks.

? Bay-ul-Wafa’ is haraam in the Asl Math-hab. Some Ulama of the later era (Muta-akh-khireen) had condoned it on the basis of what they perceived to be a ‘need’ of the time.

? There is intense and severe difference of opinion among the later era Ulama regarding the permissibility of the Bay-ul-Wafa’ stratagem. Laborious and confused interpretations have been tendered in the attempt to give this scheme some credibility.

Mr. Omar has made a silly and an abortive attempt to resurrect the decomposed bones of the Bay-ul-Wafa’ stratagem which has continued to emit a pulverizing noxious stench through its coffin in which it was interred centuries ago. The attempt to resurrect the rotting haraam bones of Bay-ul-Wafa’ has not been constrained by any dire need.

The far-fetched and fallacious interpretation (Ta’weel-e-Baatil) and the misconstruction which modernists and liberal Molvis and Shaikhs apply to the peculiarities in the Books of Fiqh, are the consequence of a pathological desire to find accommodation for the concepts of capitalism in the Shariah. In this age, the insane craving for finding Shar’i basis for the practices of the capitalist system of economics has gripped some liberal scholars (molvis and sheikhs).

They do not research a product to discover whether it is acceptable to Islam or not. Their methodology is to wade through the Books of the Shariah and blindly latch on to any straw which they feel has the property of constituting some veneer of ‘evidence’ to justify the riba concepts of the kuffaar capitalist system.

Following in the footsteps of such scholars, Mr. Omar too has set himself up as a ‘scholar’ of Islamic jurisprudence, making a hash of whatever he randomly extracts from the books of the different Math-habs, nibbling from this basket and that basket like the holy bulls and cows of the Hindus roaming about aimlessly getting whacked by the irate vendors into whose baskets they plunge their unwanted snouts and traps. This is the condition of the modernists and liberals who crave to be seen as authorities of the Shariah.


Mr. Omar claims:

In the context of Islamic banking, it becomes necessary to use “promises” in relation to different financial instruments. For example, in a Murabahah transaction, the client promises, or undertakes to purchase the commodity (in terms of a Murabahah sale) after the bank has acquired the same from the supplier and has taken actual or constructive possession thereof.”

This drivel which Mr. Omar has expounded is in conflict with the Shariah. ‘Islamic banking’ in the conception of the liberals is nothing other than the capitalist banking structure. There is no such concept as ‘Islamic banking’. Whatever system of banking the modernists have invented and managed to acquire a ‘shar’i licence’ from the liberal scholars, and the hired scholars of their so-called ‘shariah boards’, after the application of a very transparent ‘islamic’ veneer which hopelessly fails to provide adequate cover for the riba under-currents, is a perfect duplication of the capitalist banking structure.

There is absolutely nothing Islamic about the many so-called ‘Islamic’ banks which have mushroomed all over the world with the blessings of misguided liberal molvis and sheikhs whose prime function on earth is to issue ‘halaal’ certificates for the riba products of the Muslim capitalists.

Murabahah in Islam is a simple sale transaction unencumbered with ‘promises’. It is a straight unadulterated sale transaction in which the amount of profit is specified and declared to the buyer. There is nothing more to this simple transaction. But the modernists have presented it in the form of an incomprehensible potion which is unacceptable to the Shariah.

In the context of the Shariah, there is no need and no permissibility to fetter the simple Murabahah transaction with a promise. The promise which Mr. Omar has posited, renders the Muraabahah sale faasid (corrupt and invalid). It has already been explained that a promise is not legally enforceable in the Shariah. Secondly, if one has a valid reason for dishonouring the promise, one is not in violation of even the moral code of Islam. In addition, the sale is rendered invalid by the stipulation of the faasid condition.

Even if it is assumed that the banks do in actual fact take possession of the item – which in practice they do not – then too, the prospective client is under no legal Shar’i obligation to purchase the item. In the Murabahah as well as any other sale transaction, the capitalist bank is required to sell to the customer property which it owns. The bank does not act as an agent to sell a vehicle, etc. which belongs to another party. It sells its own property.

If a prospective customer refuses to purchase the item after the bank has presumably procured it, the client cannot be held liable for anything. The bank is a multi-billion rand riba empire. It simply has to sit with the vehicle and find another buyer if the first prospective buyer refuses to purchase. There are risks involved in all avenues and categories of trade and commerce. The Qur’aan Majeed unequivocally declares:

“And Allah has made lawful trade, and has prohibited riba.”

Notwithstanding all the ballyhoo surrounding the ‘Shariah-compliant’ products of the neo-capitalist Muslim banks, every person with an average intelligence understands that the banks are primarily riba money-lending institutions. They have a natural aversion for trade. The multitude of prevaricated terms and stipulations which their sale and leasing agreements embody bear ample testimony for the fact that banks are not traders in the true sense of the word. They are basically, essentially and primarily money-lenders, selling money for money – dealers in Riba.

Their ‘Islamic’ portfolios are achievements of skulduggery – Islamic sounding names, with natures drenched in Riba. Thus, the end result of all dealings with ‘Islamic’ banks is generally the same, and in many case worse than the ultimate result of kuffaar banks in monetary terms. You end off paying more for a product if the deal is executed via the channel of the ‘Islamic’ bank.

Traders carry stock – merchandise and undertake all the risks and hardships concomitant with normal, healthy trade. If the trade is accompanied by honesty and piety – the Taqwa defined in the Qur’aan and Sunnah—such traders qualify for the glowing accolade stated by Nabi-e-Kareem (sallallahu alayhi wasallam):

“Know, verily, the aid of Allah is with the pious traders.”

No so-called ‘Islamic’ bank can aspire for this Divine Aid, for the simple reason that banks are institutions of Riba, not of trade.

Consider the haraam insurance trade. People acquire insurance with corrupt motives. They commit arson to insured property, murder insured relatives/friends, and stage burglaries to collect insurance money. Such corruption is a frequent occurrence. Yet, the insurance companies tolerate it, and despite such superficial losses, they continue with minting their money. The banks too can quite comfortably tolerate the rare case of refusal to buy. But a mentality corrupted with the pollution of Riba miserably fail to understand such simple facts due to the inordinate greed for more and more money.

The flimsiest stratagem which hopelessly fails to pass the test of technical validity in terms of the rules to constitute an adequate legal ploy for circumvention of Shar’i prohibition and the charge of fasaad, will be adopted for making a contract ‘shariah-compliant’ simply for the sake of insulating the bank against the probability of a rare cancellation or reneging of a client from a promised purchase.

No trader who carries merchandise for sale will hold an interested buyer liable for any damages if he reneges at the last moment and purchases the product from a competitor for whatever reason he deems appropriate. This cannot be expected from those swimming in the blood of Riba.

But, in practice the banks suffer absolutely no loss if a client who had intended to enter into a sale reneges. The banks have an understanding with the dealers. If the client refuses to buy, the bank simply does not purchase the vehicle from the dealer. Mr. Omar seeks to pull wool over the eyes of the Muslim community with his drivel of “actual or constructive possession”. No such possession occurs in relation to the banks who are negotiating Muraabahah deals with prospective clients.

The massive aversion banks have for pure and holy trade, precludes them from spending a few rands to appoint a real living human being (not a stupid legal entity termed legal person) to take actual and physical possession of the asset purchased with the aim to resell it on a Muraabahah. Their greed is shocking and alarming. Tedious attempts will be made to split hairs to avoid hiring a man to take actual possession of the asset.

This attitude of the banks necessitated the production of the concept of ‘constructive possession’ which the hired scholars of the ‘shariah boards’ have to fabricate under duress. The fabrication of terminologies has been designed to bamboozle and dupe the unwary and the ignorant. When there is no possession, the ‘scholars’ describe it as ‘constructive possession’. They make fools of themselves and understand the whole world to be an abode glutted with fools, hence the fiction of ‘constructive possession’ is presented to make the product supposedly ‘shariah-compliant’.

This clique – ‘shariah-compliant’ – is now so over-worn and out-worn that it makes the user sound and look foolish. It has become a laughable expression denoting the silliness of the speaker.

Should possession truly and Islamically occur, thus saddling the bank with an unwanted vehicle which the client had rejected, the bank will simply have to find some other way to overcome the problem. But reneging from a promise to buy is so rare that it poses no problem which necessitates the implementation of measures to overcome it.

Assuming that such a need arises, there will be other Shariah stratagems – valid measures – which could be implemented. Since the mentality of Muslim banks is also anchored to capitalism, they fail to understand any system other than methods which conform to the capitalist ideology and methodology. Their minds indoctrinated with capitalism and their hearts darkened by devouring riba, view the simple Islamic methods of trade too cumbersome and even impractical in the context of their capitalist system of banking which they ludicrously dub ‘Islamic’ banking – a system which brooks no scope for the normal risks associated with lawful trade.


Pursuing his conjecturing, Mr. Omar states:

If the client refuses to conclude a Murabahah sale at the relevant time, then he or she is in breach of promise (to purchase). The difference between the price paid by the bank to the supplier (under the first sale), and the proceeds of realizing the asset in the open market, represents the actual direct damages that would be suffered by the bank. Such damages may be recovered by the bank from the client as a result of breach of promise…”

This is utterly baseless. It is a pure figment of his imagination. Just from where did Mr. Omar suck this stupidity? Did the ‘great Ibn Qudama’ perhaps prescribe it?

A Hukm in the Shariah vacillates between the two extremes of halaal and haraam. Let Mr. Omar say if his damages theory is a halaal imposition of the Shariah, discardence of which is haraam and sinful. If someone claims that his damages theory is bunkum – stupid nonsense – and humbug, will that person be guilty of kufr for having rejected a Shar’i Hukm? Most assuredly, no one will have to answer in the Divine Court on Qiyaamah for having discarded Mr. Omar’s personal theory which he has sucked from his thumb. There is not a single jurist of any Math-hab whom Mr. Omar could cite to bolster his baatil damages theory.

In the very first instance, the bank suffers no loss whatsoever. If the client refuses to purchase, the bank simply does not purchase the vehicle from the dealer. There exists this understanding between the banks and the dealers. The understanding between the dealer and the bank is a separate issue which gives rise to certain consequences which do concern the Shariah. This will be bypassed. If there is a need, it will be discussed at a later stage.

For the purposes of our present refutation of Mr. Omar’s drivel and baatil, it will suffice to know that if the client refuses the vehicle, the bank does not sit with it. It will remain the property of the dealer. In so far as the bank and the dealer are concerned, the sale simply did not take place. The contention of ‘loss’ is fallacious.

On the assumption that after the bank has actually paid for the vehicle and taken “actual or constructive possession”, the client refuses to purchase, then too, according to the Shariah it cannot pursue the recalcitrant client. The bank sits with its own property. The client cannot be held liable for any ‘loss’ which the bank suffers if it sells the asset less than the price it had paid for it.

The merchandise which a trader acquires in the hope of selling to clients who had promised to purchase, or in the expectation of selling the stock, is his sole property which he had bought at his own risk. All trade comes with risks. There is no 100% insulation against risks. The argument that the prospective client is the cause of the ‘loss’ by virtue of breach of promise is not accepted by the Shariah because a promise does not give rise to a sale transaction. Explaining this fact, Hakimul Ummat Maulana Ashraf Ali Thanvi (rahmatullah alayh) states:

Question: Amr asked Zaid to purchase for him some stock and to sell it to him on credit. The time of payment will be after a month or at any other time which can be agreed on. He would give him 5% profit. Zaid responded that he would buy the goods. However, Zaid insisted on a written undertaking to ensure that Amr would not dishonour his promise. Amr agreed.

Answer: Firstly, the mutual discussion between Zaid and Amr is only a promise. It is not an incumbent transaction on any of the parties. Even after Zaid purchases the goods and Amr refuses to accept it, Zaid has no right whatsoever of compelling Amr (to purchase). If in customary practice (Urf) Amr is regarded to be bound (to purchase the goods in view of his promise), then this transaction is haraam, otherwise halaal.”

Mr. Omar desires to override the Shariah with his attempt to resurrect the putrefied bones of Bay-ul-Wafa’. He behaves as if all the great Ulama-e-Muhaqqiqeen had been unaware of Bayul- Wafa’.

The ‘damages’ which Mr. Omar suggests is owing to the bank are nothing other than Riba. Riba is the cornerstone and lifeblood of the capitalist system. In the miserable endeavour to award Shar’i credibility to the riba transactions of the bankers, Mr. Omar could unearth nothing better than the haraam corpse of Bay-ul-Wafa.

The two arithmetical illustrations presented by Mr. Omar, in which he calculated the riba sum ‘owing’ to the bank under guise of ‘damages’ are laughable. He has attempted to appear professional with his figmentary illustrations, but really has made a fool of himself. He lacks absolutely in even the flimsiest Shar’i evidence for his attempt to legalize riba.


Miserably failing to substantiate his opinion in terms of the Hanafi Math-hab, Mr. Omar flits to the Math-hab, citing a minority view on the legal incumbency of a certain category of promise. He thus presents the view of a Maaliki jurist as a basis for legalizing the faasid condition of the promise which encumbers the haraam Bay-ul-Wafa’ stratagem.

Mr. Omar was born a Hanafi. He conducts his religious practices as if he is a Hanafi. To the best of our knowledge he has not publicly reneged from the Hanafi Math-hab. This Hanafi muqallid who lacks in the necessary Shar’i qualifications to permit him to speak on even minor issues of the Hanafi Math-hab, has assumed on himself the unholy burden of posing as a ‘mujtahid’ of the Maaliki Math-hab. Even a Mufti of high rank of the Hanafi Math-hab has no right to flit from his Math-hab and issue fatwa on terms of the Maaliki or any other Math-hab.

Mr. Omar has a flair for whimsical selection from the different Math-habs. If something suits his free-lancing palate in the Hambali Math-hab, then he cites Ibn Qudaamah. When the Hambali Math-hab is in conflict with his desires, he will select from the Maaliki Math-hab or from any other Math-hab to bolster his baatil whimsical opinions. He has developed the practice of unprincipled argumentation whereby he extracts just any mas’alah from any Math-hab in abortive attempts to produce substantiation for his nafsaani opinions primarily to appease the capitalist banks.

For sustaining the corrupt (faasid and baatil) transactions of the capitalist banks, Mr. Omar was constrained by a total lack of Shar’i evidence to attempt resuscitation of the putrefied carrion of the Bay-ul-Wafa’ stratagem. When the hollowness of this rickety stratagem appeared glaringly conspicuous in view of the emphasis of the Hanafi Math-hab on the prohibition of Bay-ul- Wafa’, and due to the total lack of evidence to support the idea of the legal enforceability of a promise, Mr. Omar cast his gaze on other pastures. Fishing in the Maaliki Math-hab, he managed to select the view of legal enforceability of promises propounded by some Maaliki Ulama. He thus cites the Maaliki jurist, Sahnoon who stated the legal enforceability of a certain category of promises.

While Mr. Omar has cited a view of the Maaliki Math-hab, to extract support for his claim of a promise being legally enforceable – a claim on which rests his whole theory pertaining to his deceptive alternative – he either conveniently ignores or is ignorant of the Maaliki Math-hab’s ruling on the very Bay-ul-Wafa’ which constitutes his fundamental basis without which the entire edifice of his capitalist model crashes to the ground.

Let us now see what the Maaliki Math-hab says about Bay-ul- Wafa’ which is known to the Maaliki fuqaha as Bay-uth Thunya. The Maaliki Math-hab defines this transaction as follows:

“Bayuth Thunya is that a person says: ‘I sell to you this asset or this commodity on condition that if I come to you with the price (which you had paid me) within a specified time or whenever I come to you, the commodity will be returned to me’….In Al-Mudawwanah it appears: ‘A person buys a commodity on condition that when the seller returns the price, then the commodity is his. This is not permissible because it is a sale and a loan. In fact, Sahnoon said that it is a loan accompanied by benefit.” (Fathul Alil Maalik, Vol. 1. page 291)

Mr. Omar has been at pains in his labour to substantiate his claim of the validity of legal enforceability of a promise by means of a stratagem (Bay-ul-Wafa’) which both the Hanafi and the Maaliki Math-habs condemn. Furthermore, he cites the Maaliki Jurist, Sahnoon in his abortive bid while this eminent Maaliki Faqeeh rejects Bay-ul-Wafa, classifying it as a loan which draws riba.

Let us see how the other Maaliki Fuqaha view the Bay-ul- Wafa’ mutant.

“Ar-Rajraji said: ‘If the (buy-back) condition is cancelled will the sale be permissible or not? There are two views. The one is that the sale and the condition are baatil. And this is the Mash-hoor (the popular, majority, most authentic) view. The second view is that the sale is permissible when the (corrupt) condition is cancelled.” (Fathul Alil Maaliki, Vol. 1, page 291)

It should be clearly understood that the difference among the Maaliki Fuqaha is not related to the invalidity and prohibition of Bay-ul-Wafa’. Their difference pertains to the status of the sale after cancellation of the offensive/corrupt buy-back condition. The most reliable and majority view is that notwithstanding the cancellation of the corrupt condition, the sale remains baatil (null and void) and haraam. The minority view of the permissibility of the sale does not relate to Bay-ul- Wafa’. It pertains to the sale minus the corrupt buy-back condition. It will thus be seen that there is consensus of the Maaliki Fuqaha on the hurmat and butlaan of Bay-ul-Wafa’ which constitutes the fundamental basis of Mr. Omar’s edifice erected for awarding Shar’i licence to the riba practices of the capitalist banks.

Rejecting the validity of Bay-ul-Wafa, Imaam Maalik (rahmatullah alayh) says:

“The basis of this sale is neither permissible nor good. The buyer is liable for whatever benefit he had gained (from the commodity), and the owner of the commodity is liable for whatever the buyer had spent in the maintenance of the asset (while it was in his custody).” (Fatul Alil Maalik, Vol. 1, page 291)

“Muhammad Bin Rushd said: ‘They (the Maaliki Fuqaha) name this sale, ‘Bayuth Thunya’. ….It has been said that it is a bay’ faasid because the seller imposes on the buyer the condition that he is most deserving (of buying back the commodity) when he brings the price (the amount which the buyer had given him). (The sale is faasid) because it is like a sale and a loan. And this is the view of Imaam Maalik. (The other view is): It has been said that this is not a sale. It is merely a loan which brings with it benefit (i.e. riba). Sahnoon has said this in Al-Mudawwanah. This is also the view of Ibnul Majishoon and others. (It is not a sale) because the buyer gave the price as a loan to the seller on condition that he (the buyer) derives the benefit of the asset’s income until the time he (the seller) returns the loan. On the basis of this view, the yield (income of the asset) will be returned to the seller because it is (in fact) the price (paid) for the loan. And this is haraam.” (Fatul Alil Maaliki, Vol. 1, page 291)

“A person purchases a commodity on condition that when the seller returns the price (the amount he had received from the buyer), the commodity is his (the seller’s)—this is not permissible.” (Fathul Alil Maaliki, Vol. 1, page 292)

“Ibn Salmoon (a Maaliki jurist) said that Ibn Abdul Ghafoor said: ‘Verily, it has been said that Bayuth Thunya is everlastingly faasid and mardood, because it is haraam and muharram (the prohibition is emphasised in this expression). It is an avenue among the avenues of Riba. The view of the majority of Ulama as well as the Math-hab of Imaam Maalik and Ibn Qaasim is that there is no rental for the asset whether the time is specified or not, because verily, it is a faasid sale according to them. The amal (practice/ruling) is with this (Mash-hoor view).’ ” (Fat-hul Alil Maalik, Vol. 1 page 292)


About his “valid alternative”, Mr. Omar says:

In the hypothetical situation, the client sells the property to the bank. The bank in turn separately and apart from the sale, promises to lease the property back to the client upon mutually agreed terms.”

What does the Maaliki Math-hab have to say regarding this stupid alternative which Mr. Omar endeavours to legalize for the capitalist banks on the basis of the fiction that the Maaliki Math-hab permits such riba dealings? Scuttling Mr. Omar’s theory and ‘valid alternative’, the Maaliki Math-hab states unequivocally its rejection of the nonsense of leasing a man’s own property to him:

“In our age a practice is widely prevalent. That is: A man, for example, sells his house valued at four or five thousand dinars for 1000 dinars. He stipulates the condition that when he comes up with the price (1000 dinars), the buyer has to return the house to him. Then (after the deal), the buyer leases the house to the seller (the actual owner) for a rental of 100 dinars per annum (for example).. This he (the buyer) does before he takes possession of the house and before the seller has vacated the house with his goods (furniture, etc.). On the contrary, the seller remains living in the house. (In the theory of Mr. Omar, he has taken ‘constructive possession’ of the house).

The buyer takes the mutually agreed rent from the seller. This is not permissible without any differences of opinion, for verily, it is categoric Riba. The transaction which they had transacted superficially is of no consideration. Because in effect it is a benefit for the buyer in a faasid sale. Infact, even if the buyer takes possession of the commodity (the house) and hands it over to the seller after he had vacated it, then he (buyer) leases it to him (seller) in the aforementioned way, it is not permissible because the exit (of the asset from the sellers possession) and its return to him are nonsensical…..The situation culminates in categoric Riba. This is manifest for anyone who reflects. And Allah knows best.” (Fat-hul Alil Maalik, Vol. 1. page 293)

This categoric rejection by the Maaliki Math-hab of Mr. Omar’s baseless alternative is an adequate last nail for the coffin of his capitalist ‘buy-back’ model.


(1) Bay-ul-Wafa’ is baatil and haraam according to both the Hanafi and Maaliki Math-hab. In fact, according to all four Math-habs.

(2) The consequence of Bay-ul-Wafa’ is Riba.

(3) The Bay-ul-Wafa’ stratagem constitutes the fundamental basis of Mr. Omar’s alternative proposal. The collapse of this stratagem brings about the negation of the fallacious alternative – and alternative which is haraam.

Mr. Omar’s baseless ‘valid alternative’ is an unprincipled patchwork comprising of pieces of masaa-il torn from their respective contexts from the Hanafi and Maaliki Math-habs. He has attempted a fusion which is invalid and exceedingly corrupt in terms of both the Math-habs.

While the Hanafi Math-hab rejects the validity of Bay-ul- Wafa’, and the legal enforceability of a promise, the Maaliki Math-hab, in particular the Maaliki Jurist, Sahnoon whose view of legal enforceability Mr. Omar has cited, unites with the Hanafi Math-hab in condemnation of Bay-ul-Wafa’.

Despite Sahnoon’s view of legal enforceability of a certain class of promises, neither he nor other Maaliki Fuqaha, relate this enforceability to the promise which is stipulated as a condition in relation to the sale transaction. It is abundantly clear from the unanimous ruling of the Maaliki Math-hab on the issue of Bayuth Thunya that the legal enforceability of a promise does not apply to promises which in terms of the Maaliki Math-hab are faasid conditions attached to sale transactions. A faasid condition, be it in the form of a promise attached to a sale contract, is haraam. A haraam act cannot be legally enforceable.

The flair for selective extraction of juz’i (particulars/details) masaa-il (rules), as opposed to Usool (Principles), from different Math-habs, and to present them in isolation of their context, divested of their accompanying shuroot (imperative conditions), then to utilize such hybrid mutations as principles for the formulation of ahkaam by a defective syllogistic process, is a demonstration of compound ignorance and subservience to the whimsical fancies of the nafs.

Consider for example Mr. Omar’s rash citation of Sahnoon, the Maaliki jurist. In his random quest for strands and snippets from the different Kutub of the Math-habs to present as evidence for his fallacious theory, he stumbled across the view of Sahnoon relative to enforceable promises. Without comprehending the context of this Maaliki ruling, Mr. Omar hastily and baselessly concluded that promises in general are legally enforceable in terms of the Maaliki Math-hab. Yet this is not the case.

After having made this assumption, he further perpetrates the gaffe of failing to ascertain what precisely is the view of Sahnoon in particular, and of the Maaliki Fuqaha in general on the issue of Bay-ul-Wafa’ which he (Mr. Omar) has fixed as the fundamental basis and guiding principle for his theory of legalized riba.

The absurdity of Mr. Omar’s syllogistic reasoning in the endeavour to fabricate ‘fatwas’ is the consequence of the silly, haraam exercise of selecting just any statement or view from any Math-hab which to his mind appears to bolster his corrupt ‘ijtihad’. The very same Sahnoon whom Mr. Omar cites as the central pillar of support for his theory of legal enforceability of a promise, unequivocally labels the stipulated promise in relation to the sale transaction as “categoric riba”, hence haraam.

What Mr. Omar has concluded is not the Hanafi Math-hab, nor the Maaliki Mat-hab, nor the Shaafi Math-hab nor the Hambali Math-hab. His corrupt ‘fatwa’ is the fallacious ‘math-hab’ of his nafs. May Allah Ta’ala save us from such jahaalat! 

Next: Islamic Finance – Part Three

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