Musbri Mohamed
DIL; ADIL ( ITM )
Pursuing MBL ( UKM )
1
Scholars of Islamic economics ought to explain the concepts
and principles of the Islamic financial and economic system
and present its reference and applications to wider audience.
2
Shariah originates from the rules dictated by the sources
of Islamic law. The sources refer are in sequence as follows:
• the Qur'an,
• the hadith texts (the words, actions, recorded statements
and practices of Prophet Muhammad (pbuh) and this
include hadith Qudsi),
• Ijma (consensus of the ulama) and qiyas (drawing analogies
deduction and reasoning from the Qur'an and hadith
texts), and
• Ijtihad (the scholar's own reasoning). Note that a scholar's
ijtihad only comes after the analysis of the other sources,
and remains within the parameters established by them.
3
The basic principles of an Islamic financial system can be
summarized as follows:
4
Islam encourages the earning of profits but forbids
the charging of interest because profits, symbolize
successful business and creation of additional
wealth whereas interest, determined gambling, is a
cost that is accrued irrespective of the outcome of
business operations and may not create wealth if
there are business losses.
5
Economic experts assert that the system of financial
derivatives can not bring about real development. Financial
derivatives create only money, with no real value, causing
inflation and price rise ,as well as moral decadence. For
example, financial derivatives caused quick collapse of East
Asian financial institutions.
In the Islamic financial system,
risk sharing, promotes
entrepreneurship, discourages
speculative behavior, and
emphasizes the sanctity of
contracts are being encouraged,
and it closes the door to the
concept of interest and precludes
the use of debt-based
instruments.
6
The financial products offer in the financial system by the
Islamic banking institution includes financing facilities for asset
acquisition, trade financing and corporate financing.
7
Financial products offered by the Islamic banks,
just like the conventional banks, aims to gain
profit. However in the Islamic financial system,
the intermediaries are not allowed to deal with
interest or to engage in any business or trade
prohibited by Islam.
8
Shariah prohibits all forms of investment-based contracts of
funding that involve interest loans forbidding financial
transactions that involve gharar (risk-taking) and gahalah
(unawareness).
9
Al-Rahn (Rahnu)
Syariah Ruling
10
Al-Ijarah
Syariah Ruling
Surah Al-Qasas verse 26
“Trully the best men for you to employ is the man who is strong and
trusty.”(28:26)
Hadith:
Prophet Muhammad said that, “Give the employee his due wage before
his sweat dries.”
Al-Ijma’:
All scholars from sahabah time agree that ijarah is permissible since
people need benefits.
11
Syariah Rulling
12
Who’s to blame ?
13
President Obama, speaking at a gathering of chief
executives in Washington yesterday i.e 12 March 2009,
acknowledged that the nation had been lured by the
"illusion of prosperity," and he blamed "reckless speculation
and spending beyond our means on bad credit and inflated
home prices."
14
Solution
Islamic economy promotes
participation in profit, loss, and
actual exchanges of money and
assets. In fact, there should be real
interaction between the wealthy,
employers, the employees, and
financial experts. There is no party
who is a constant winner or a
constant loser; yet profit and loss is
mutually shared.
15