UNDERSTAND ISLAMIC FINANCE

A blog which provide articles on Islamic banking and Finance

Ijarah

Ijarah Overview Meaning of Ijara Important Terms Important Points Types of Ijara Ijara vs conventional leasing Meaning The Arabic term ijara means “to give something on rent” Ijara simply mean leasing or hiring. Ijara is an agreement between the two parties where one party provides goods or services on a lease or rental basis and gives the Read more about Ijarah[…]

The Ruling on Commercial Insurance

    The Ruling on Commercial Insurance Question: If a businessman makes a deal with a foreign company for rice, sugar or tea, for example, the businessman takes out insurance on the property against shipwreck, fire and catastrophe, he pays the insurance at a rate of two percent against the value of the property. Then Read more about The Ruling on Commercial Insurance[…]

The Difference Between Cooperative Insurance and Commercial Insurance

The Difference Between Cooperative Insurance and Commercial Insurance Question: Cooperative insurance is sometimes described as the lawful alternative to commercial insurance. In what ways do the two types differ? And what is it that makes commercial insurance forbidden and cooperative insurance permissible? Answer: The term “Cooperative insurance” does not mean compensation, it only means mutual Read more about The Difference Between Cooperative Insurance and Commercial Insurance[…]

Rulings about Life and Property Insurance

Rulings about Life and Property Insurance Question: What is the ruling on insurance, whether it be life insurance or property insurance? Insuring one’s life and property is forbidden; it is not permissible due to the fact that Al-Gharar and usury are involved therein. And Allah-the Almighty, the All-Powerful-has forbidden all types of dealings that involve Read more about Rulings about Life and Property Insurance[…]

Quran on Riba

  Quran on Riba Quran 30:39 Whatever Ribā (increased amount) you give, so that it may increase in the wealth of the people, it does not increase with Allah; and whatever Zakāh you give, seeking Allah’s pleasure with it, (it is multiplied by Allah, and) it is such people who multiply (their wealth in real Read more about Quran on Riba[…]

The Prohibition of Riba in Stages

Allah (swt) is the only one knows his slave best. The one who created knows the adaptation process of human beings. It is difficult for us to leave a bad habit overnight. Therefore, Allah (swt) prohibited alcohol and Riba in stages. Even the prohibition of alcohol was gradual. It is in Quran (16: 67, 2:19, Read more about The Prohibition of Riba in Stages[…]

What is Riba?

The word “Riba” means excess, increase or addition. According to shariah it is any excess compensation without due consideration. Example of Riba: If a man takes a loan from a bank and he pay back the loan to with a percentage increase over the principle amount. The Quran does not indicate any particular type of riba, but the Read more about What is Riba?[…]

What is the wisdom behind legislating Zakah?

Assalamu alaikum warahmatullahi wabarakatuhu! As a muslims, we pay zakah. At the same time, we should know the wisdom behind it. Zakah has being legislated by Allah (swt). It is important to note that zakah is fruitful for a sound economy. Many Economies such as Indian economy has many serious issues like poverty, unemployment and Read more about What is the wisdom behind legislating Zakah?[…]

Zakah on the gold and silver

  Zakah on the gold and silver Overview: Introduction Zakah on women’s gold and silver jewellery. Nisab for zakah for gold and silver Introduction The ruling on zakah of Gold and silver are also applied to its derivatives such as money, jewels and ingots . The Gold kept or invested and is in the form Read more about Zakah on the gold and silver[…]