Читать книгу Contracts and Deals in Islamic Finance - Kureshi Hussein - Страница 8

The authors of this work would like to develop the understanding of the concepts of shariah and Islamic finance as the book progresses so that readers make up their own mind about the conclusion we offer. We encourage active reading and analyses and not passive reading, as we have been fortunate enough to have had mentors and teachers who encouraged learning, questioning, and understanding and not mere dogmatic rote learning.

The reader must understand that within the universe of Islamic finance money cannot be lent from one party to another with the intent of making a gain on the repayment of the loan. Conventional finance is built on the permissibility of this transaction whether it takes place between a depositor and a bank or it takes place between a borrower and a bank. To date, the aim of Islamic Finance has been to replicate the cash flows that take place in disbursing and servicing a loan with a sequence of sale contracts. For the best part of financial engineering in the industry, spot sales are combined with deferred payment sales to construct cash flows that resemble those of a loan. The underlying “sales contracts” must involve a permissible asset and the sale contract must abide by the laws of contracts of bai. Thus, much of the discourse in Islamic finance is a legal discourse based on the rights and obligations imparted to various parties in various contracts under varying circumstances.

Before proceeding further we therefore wish to highlight some salient features and legal maxims that affect the conduct of affairs of trade in Islam. As we have all learned our religion from our mothers, fathers, and tutors, whose memories are very sacred to us all, we do not want to tread on any sensitive grounds without giving due warnings.

We request the reader to consider what rules, if any, other than the rule of riba, apply to commercial transactions in Islam. The first “rule” that may come to mind is to be “fair” in one's dealings.

The texts offer no specific standards of “fairness,” but offer stories that give guidelines or parameters of what can be deemed fair. We discuss the rule of one-third in due course as well as to expound on it. The texts have been very specific, to the decimal place on one commercial transaction, which is that of inheritance, where detailed methodologies of calculation are ordained for the distribution of wealth of a deceased. Specific workings are also offered for the calculations of zakat. The texts, however, do not offer specific calculations of how a merchant, trader, or manufacturer may calculate his or her profit margin on goods or services rendered, so the discussion of riba is not about excessive interest or unfair interest, it is about interest in its absolute sense of the term, which is money returned in excess of money borrowed.

There are other parameters of legal rulings within the discourse of Islamic commercial law, and this extends to three or four additional prohibitions. Shariah discourages elements of uncertainty in contracts, or gharar, and it forbids speculation and gambling, or maysir. The texts also admonish hoarding of goods, admonish purchasing goods from caravans outside the city limits before they enter the city to inflate prices, and prohibit the circulation of wealth among the few. Some can argue that these five or six principles are sufficient to develop a judicious and fair economic system.

The Muslim world has manifested various economic models in various times in history. In peace time, there seems to be a preference for free markets, and in war time, there seems to be preference to command economic policies, especially in the distribution of wheat.

This work does not tackle the topic of using fiat money in an economy and having a gold-backed currency, as this is the work of currency experts and monetarists, both of which we are not.

To revert back to our legal maxims, we have identified four core legal maxims and two supplementary ones, which are all that is available for a believer to follow in order to develop an economic system of which a financial system is a part.

The reader should be aware that Islam stipulates specific conditions under which an individual has a right to earn a profit. These conditions are that an individual may be either a provider of capital, or a provider of labor, or assumes certain liability for events (or assumes risk) in order to be entitled to any profit from any economic venture. We discuss this in detail in subsequent chapters.

The reader should be additionally aware of the prohibition of certain trade practices, like selling what one does not own. This was a prohibition identified in the texts by the Prophet Muhammad (saw), but the Prophet (saw) extended exceptions to this condition for certain specific kinds of transactions that involved agricultural goods and made-to-order goods. The sale contracts of salaam and istisna are exempt from this condition.

The reader should be additionally aware that Islam limited the sale of certain goods to be on spot basis. These goods are referred to as ribbawi items. Such goods can only be bought or sold in a spot transaction where buyers and sellers are present.

The reader may be unaware of the permissibility of the difference between a spot price and a credit price or a deferred price. This permissibility allows a seller of goods to charge a price X for the sale of goods if the buyer pays the full purchase price on spot, and allows the seller to sell the same goods at a price Y, which is greater than X, if the buyer pays in installments in the future or via a balloon payment, but takes immediate possession of the goods at time of contract initiation.

Another prohibition is that two contracts cannot be part of one contract, or that one contract cannot be conditional on another. Party A cannot sell a good to Party B on the condition that he sells another good to Party A or even to Party C.

These prohibitions are not chronologically organized in the texts, nor are they neatly arranged in a chapter of any handbook. These prohibitions have been passed on by the Law Giver in different situations and within specific circumstances. The historical background and context of these rulings are touched on where necessary.

The reader may have discovered that certain assumptions may not be adequate. A Muslim in general may think that there are specific criteria for calculating profit over a cost price; after all, we are always bargaining with sellers in the bazaars, but yet none exist. However, several other legal maxims exist of which the ordinary Muslim of today may not have heard.

To be fair to all Muslim readers of various backgrounds and levels of education we examine the contracts that are the fundamental pillars of Islamic finance. We examine their classical structures (as they were used in the time of the Prophet [saw]), and we shall identify the “enhancements” made to these contracts to adapt to the modern economic times of today. We leave it up to the reader to decide if these enhancements defeat the purpose of prohibitions, circumvent them to achieve impermissible outcomes, or are beneficial innovations that are for the good of the ummah (Muslim Community). The reader may also conclude that the amendments made are necessary to achieve the goals of modern economic life, but may question whether the goals of modern economic life are worth striving for. Let us say at the outset, that discussion is beyond the scope of this work.

We begin our discussion with the most controversial contract in Islamic finance, that of bai al inah, but before we do, here is a word on who the Law Giver is today. In 620 A.D. the Law Giver was Allah (swt) who spoke through Muhammad (saw) and appointed him as another Law Giver for mankind. No Muslim contests that there is no other primary source of law in Islam. But how many laws did the Law Giver actually spell out? The reality is very few. As times changed, situations changed, the Prophet (saw) left our world, as did His companions, the successors of his companions and the successors of successors. New dominions came under Muslim rule, and Islamic law evolved over time. In the case of selling what one does not own, the enhancements came by the original Law Giver himself.

The question to ask is who is the rightful Law Giver today? Every Muslim country is today either a democracy or a monarchy with Iran being the only official theocracy. Within democracies, elected members of Parliament pass laws in a country. If these members of Parliament are Muslims, it can be expected that they will pass laws within the guidelines set by the shariah. In a monarchy, the monarch is the Law Giver and in a theocracy, the cleric. In the space of Islamic finance certain bodies have been set up that are funded by the various Muslim countries, and these bodies have gathered together a bodice of shariah scholars who now issue legal guidelines or fatwas. They assemble in an ijmah and pass certain rulings based on their research and understanding. Whatever we as authors of this work are commenting on is not based on fatwas we have individually devised.

A reader can also argue: Who gave shariah scholars the authority or the right to pass fatwas? The answer is no one. These fatwas are not binding legislation of all member countries, although some are; however, the infrastructure of developing a sound education system of developing shariah scholars and having benchmarks for their qualifications is sadly missing from the Muslim world and we acknowledge that. Any reader of Islamic finance should view the websites of the following entities:

Accounting and Auditing of Islamic Financial Institutions (AAOIFI)

Islamic Financial Services Board (IFSB)

Islamic Development Bank

International Shariah Research Academy

Organization of Islamic Countries Fiqh Academy

Bank Negara Malaysia Shariah Advisory Council

Shariah boards of the Central Banks of various countries

Dow Jones Islamic indices

We also advise the reader to download a version of Sahih Muslim and the Holy Quran in his or her language to keep as a reference.