07-27-2009, 04:33 PM
Only the presence of factor of chance does not invalidate or makes Haram any thing. If the probability that relative of a young person will die in next one year is 9/10 and the said person receives inheritance on the death of his relative. This money will be Halal for him. But if factor of chance is apparent in a transaction that the money of all the participants will go in the pocket of a person or only few persons then it will be Haram because it is like gambling. Thatâs why all types of lotteries are Haram. In the same manner the premium of all policyholders goes in the pockets of some persons. Contrary to this, Islamic Insurance gives the concept of mutual fund in the insurance as well and contributories also receive a return on the part of premium that is used for the investment purpose.
Contrary to banking business, insurance started from the Islamic world. The maritime traders of Muslim Spain were the pioneers of insurance. The concept on insurance was introduced by these Muslim traders as mutual fund. Any merchants who suffered loss during voyage compensated from this mutual fund. Each merchant contributed an amount in this fund. In latter centuries this concept was adopted by European merchants and latter like other business factor of interest (Usury) was introduced in insurance.
Before Muslim Spain we also find an example of mutual responsibility in the life of Apostle of Allah (SAW).After the marriage with Hazrat Khadija Hazrat Muhammad (SAW) was involved in the trading on behalf of Ummul Momineen. During this period a trading caravan of Arab traders experienced a desert storm and lost many camels, horses and merchandise in the desert. Only some persons could be saved from this storm. They returned Makkah and told the whole story then a mutual fund established by the leaders of Makkah in which all traders contributed . Hazrat Muhammad (SAW) also contributed in this mutual fund.
As far as your question regarding penalty charged by the Islamic banks , Islamic banks usually use the governing rates of the money market for imposing penalty. This is because of absence of Islamic Capital and finance market. (Point to be noted, I have said in my last posts that the formation of Islamic insurance company will lead towards formation of Islamic capital market) . This is common practice of finance and money market that the prevailing rate are use for different transactions, penalties or charges. Just like âKIBORâ has been provided to mean Karachi Interbank Offered Rate applicable on first day of each quarter of the financial year. Currently KIBOR is now to be used for the purpose of applying the rate of compensation on delayed refunds u/s 171 as well as the rate of additional tax u/s 205 of the Ordinance. The person on which penalty is imposed can pay it as donation or charity to any madrsa or charitable institute and produce receipt of this donation to the bank to waive penalty.
I will feel very pleasure in discussing pros and cons of the Gold Standard but I would like to respond on this topic on economics forum because it is purely related to economics.
Regards,
Awais Aftab
Contrary to banking business, insurance started from the Islamic world. The maritime traders of Muslim Spain were the pioneers of insurance. The concept on insurance was introduced by these Muslim traders as mutual fund. Any merchants who suffered loss during voyage compensated from this mutual fund. Each merchant contributed an amount in this fund. In latter centuries this concept was adopted by European merchants and latter like other business factor of interest (Usury) was introduced in insurance.
Before Muslim Spain we also find an example of mutual responsibility in the life of Apostle of Allah (SAW).After the marriage with Hazrat Khadija Hazrat Muhammad (SAW) was involved in the trading on behalf of Ummul Momineen. During this period a trading caravan of Arab traders experienced a desert storm and lost many camels, horses and merchandise in the desert. Only some persons could be saved from this storm. They returned Makkah and told the whole story then a mutual fund established by the leaders of Makkah in which all traders contributed . Hazrat Muhammad (SAW) also contributed in this mutual fund.
As far as your question regarding penalty charged by the Islamic banks , Islamic banks usually use the governing rates of the money market for imposing penalty. This is because of absence of Islamic Capital and finance market. (Point to be noted, I have said in my last posts that the formation of Islamic insurance company will lead towards formation of Islamic capital market) . This is common practice of finance and money market that the prevailing rate are use for different transactions, penalties or charges. Just like âKIBORâ has been provided to mean Karachi Interbank Offered Rate applicable on first day of each quarter of the financial year. Currently KIBOR is now to be used for the purpose of applying the rate of compensation on delayed refunds u/s 171 as well as the rate of additional tax u/s 205 of the Ordinance. The person on which penalty is imposed can pay it as donation or charity to any madrsa or charitable institute and produce receipt of this donation to the bank to waive penalty.
I will feel very pleasure in discussing pros and cons of the Gold Standard but I would like to respond on this topic on economics forum because it is purely related to economics.
Regards,
Awais Aftab
