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Credit Cards on trial

2012-09-19
September 19, 2012

Held at the Islamic criminal court:
Sharī`ah v. Credit Card & two others


Mr. Luxor (The administrator): ‘Just to remind participants and the watching public, these are proceedings which are designed to determine whether an accused is un-Islamic or not, and, if the former conclusion is reached, which penalty ought to be imposed on him for such offence.’
Mr. Lecter (the orderly): ‘Silence in court, and please switch off your cellular phones.’

The judge is walking in.
Judge Juhā (turning to the clerk of the criminal court): ‘Mr. Lexar, is the roll printed out?’.
‘Yes it is, judge. Matter number one on this week’s roll is Sharī`ah v. Credit Card & 2 others.’
‘I see Mr. Shafshawānī is here representing the Sharī`ah.’
‘Indeed so, honourable judge.’
‘Mr. Shabrakhītī, are you representing all three accused?’.
‘Not so, judge. I am representing accused number 2, Mrs. Shariah Islamic Credit Card, as well as accused number 3, Mrs. Cordoba Gold Card. Accused number 1, Mr. Credit Card, is not in attendance.’
‘Any reason for the first accused’s absence from the proceedings, Mr. Shafshawānī?’.
‘The reason is lack of jurisdiction, honourable judge. Mr. Credit Card is a citizen of the Abode of Kufr. We sought cooperation from the authorities in charge of Dār al-Kufr to enable the main accused to stand trial before this noble tribunal, but to no avail, judge. One day we shall have that power, inshallāh.’
‘Inshallāh. How are we then going to proceed with regard to such accused, Mr. Shafshawānī? Any suggestion?’.
‘Sure. I received documentary evidence from the relevant officials in Dār al-Kufr, as well as from citizens of Dār al-Islām, including a synopsis of what the position in support of the alleged innocence of accused number 1 is. It is all in the bundle which has been made available to the honourable judge, which I have marked “CC”. I am bound by the tenets of amānah to duly lay out the basics and details of such position with no addition or subtraction, for the judge to be able to rule on the issue based on an informed decision.’
‘That’s fair enough. You can then proceed.’
‘Judge, I shall make it easier for this revered forum by presenting first what has been adduced as alleged proof of the innocence of accused number 1, following which I am then going to lay out the Sharī`ah’s counter-view on that, so as for me to demonstrate that he is in fact guilty of the offence of un-Islamic practice, and should be sentenced accordingly.’
‘If I can understand things more easily that way, it would be an excellent idea.’


The case against accused 1, Mr. Credit Card
Presented on behalf of the Sharī`ah by: Shaykh ash-Shafshawānī
Due to the tribunal’s lack of jurisdiction over such accused, Shaykh ash-
Shafshawānī shall likewise put forward the case for the defence


1. ‘Essentially, those who defend the lawfulness of the first accused in Islam argue that, so long as the cardholder is fully confident that he will pay the bill to the issuer of the first accused, such as bank x which issues, to the cardholder, the accused number 1 under the name Visa Gold Card, and it is not reasonably expected or foreseen that any interest will accrue because of a delayed payment by the cardholder, the transaction is not forbidden.
Honourable judge, you can look at the fatwā given in this regard by Mufti Taqi Usmani, which is found on page 1 of bundle “CC” in front of the judge. As for pages 2 and 3 of
it, they contain a similar fatwā on using the first accused by one Muzammil Siddiqui, an Austrian based scholar. It is dated 26 January 2006. It goes even further than the opinion given by Mufti Taqi Usmani. For Mr. Siddiqui, there is not even a need for the cardholder’s firm conviction of the ability to pay his bills on time. It is enough, to make the first accused acceptable, if bills are in fact paid “on due date”, before interest is accrued, even if it were to happen by mere fluke.
2. They support the argument by the purposive consideration of “convenience” and “removal of hardship”. The honourable judge is referred once more to the fatwā by Muzammil Siddiqui. In particular, I would like to draw the judge’s attention to what is found on page 2 of bundle “CC”. I am going to read it into the record:
“Credit cards are a convenience. They help us to charge goods and services to the card account, without carrying too much cash all the time or tying the cash for a credit purpose”.
3. They likewise refer to their widespread and in fact universal use, even in Muslim countries, as a pointer to their legality. The argument would be, ‘How can they be objectionable if so many Muslims and practically the whole wide world use them?’. Page 2 of the same bundle can be looked at in that regard.
4. All these legal opinions, and I can guarantee you, judge, there is an avalanche of them on the net, almost as if in every second house in your street there is some “scholar” lurking inside who posts fatwas online, do not even tell us what a credit card agreement, an agreement for the issuance of the first accused herein, consists in. Is it a loan? And if not, what it is?
I would like the honourable judge to turn at this juncture to pages 4 and 5 of bundle “CC”. We have there a question from a Bangladeshi brother and another fatwā, this time from Dr. Monzer Kahf, who passes out as a prominent Muslim economist and counsellor, whatever that might mean, respectable presiding officer.
Dr. Kahf states that the first accused is “a new invention”, that is, a contract which did not exist before in a form known to our Muslim predecessors. He does not want to describe it as a loan, but quotes scholars defining it as a guarantee given by the issuer (say, bank x, such as Citicorp or our local Standard Bank) to the seller (i.e. the subject selling goods to the cardholder who buys them on the strength of the first accused issued to him) who accepts it, in other words, what we would refer to as a suretyship here in South Africa, and kafālah in the fiqh; or else describing the first accused as the transfer of a debt by the debtor to another party, the issuer, what is termed hawālah in Islamic jurisprudence.
The submission such as the one Dr. Kahf makes is that, since suretyship or transfer of obligations is an acceptable transaction in Islam, then an agreement to issue the first accused, too, is automatically permissible, because scholars have catalogued the said agreement under it.
5. Dr. Kahf concedes that the “if” part of the agreement, “if you don’t pay on time = interest will be charged” is a problematic condition which is actually invoked by the card issuer, say, Standard Bank, and that it would be preferable if the so-called conventional financiers, to put it bluntly, judge, the kāfir banks, did not insert it at all. He then alleges, however, that, oh well, you might live in a place where there are no so-called Islamic financial institutions (IFI’s), and, in any event you are not entering into a loan contract with interest, but you are rather signing a contract affording you the choice of making the interest factually applicable or not.
6. Finally, honourable judge, I bring to your knowledge the fact that Mufti Taqi Usmani allows the company issuing the first accused to charge some reasonable lump sum amount for providing the services of ATM (Cash) machines, so long as it is not using that as an excuse to charge interest; and that Dr. Siddiqui approves the idea of card companies making money from charging annual fees and commissions which they take from establishments such as Mr. Price or Herrods. I shall however delve into those aspects at greater length in the course of the Sharī`ah’s case against accused number two.
Honourable judge, the aforesaid is, essentially, the sum-total of the argumentation aimed at establishing the innocence of accused number 1 at these proceedings, had such accused been allowed to stand trial in this revered forum.
I am now going to tackle the proofs against this accused.
[Shaykh ash-Shafshawānī sips a bit of water from a jug placed in front of him. It is unknown to the person taking these minutes whether the jug or the water, too, has been paid by credit card].

a) Honourable judge, if one says that a credit card agreement which launches the first accused into being is a loan of money, it cannot be halāl.
We all know that the contract of loan in Islam (qard) is a liberal transaction, one motivationally underpinned purely by generosity for other than you. It’s a contract entered into by the lender / benefactor to assist the borrower / beneficiary without the former seeking to obtain any profit for himself, rather otherworldly reward (we talk of “qard hasan”, is that not so?). It is a contract for the benefit of one party only.
I come to you, judge, and I see from your car in the parking lot that you are well-to-do, while I’m here defending the Sharī`ah and people pay for anything except for the Dīn these days. I ask you, ‘Judge, can you lend me $500?’, you look at me, there’s no money for you to make, at most you’ll lose a chunk of your wealth. I use persuasion, you oblige, you do it only to help me and get recompense from Allah.
Is this what a company issuing the first accused does, or it issues such accused in large numbers in order to make trillions of money? It is selling a profitable article, obvious.
Whoever attracts a benefit for himself in a loan, jarra manfa`ah as we say in the fiqh, that would automatically become ribawī or usurious, and here there is, on Standard Bank’s pat, charging of interest against the late payer / defaulting borrower, annual fee (for a qard hasan?), this fee and that gee, this commission and that other one, etc.
Because of this, and the condition of interest payments imposed on the cardholder for late
repayments, those advocating the legitimacy of this accused shy away from calling it a loan or even defining it at all. But surely, judge, we must define what it is, what its purpose is, and which rules are applicable to it.
b) Let us move, judge, to what Dr. Kahf had to say. He told us that it might be a contract of kafālah, of suretyship. Honourable judge, this is not just ludicrous, it is perverse.
I owe R5000 to a creditor. The creditor is not persuaded that I’ll honour my debt. He gets a guarantor who is affluent like, say, my learned colleague Shaykh ash-Shabrakhītī [a twisted smile flashes through the edge of the latter’s mouth upon hearing the remark], one who vouchsafes that, in the event that I don’t settle my debt, which is “the principal obligation”, by date x, my surety steps in and pays that amount.’
‘Please don’t look at me’, Shaykh ash-Shabrakhītī comments with a placatory look.
‘The guarantor’s is an ancillary obligation. Judge, these people are trying to sell the Muslims the idea that, before the cardholder has even incurred a debt with any merchant, say, Pick ‘n Pay or UPIM or El Corte Inglés, the first accused’s issuer such as Standard Bank has given the seller of the HD Plasma TV or lounge suit or grocery trolley a guarantee of payment, accepted by the merchant. This, honourable judge, is magic: Before the main reality is ushered into being the ancillary already exists, the secondary is there before the primary, the subordinate before the principal. The follower has already given his oath of allegiance before the Khalīfah or Sultan is even born or placed on the throne.
And again, judge, a suretyship is entered into to benefit a fellow human. I guarantee my brother’s debt because, on his own, his creditworthiness might not be acceptable, so I step in to lend him strength. The company issuing the first accused, by contrast, intends benefiting itself and earning loads of money. Standard Bank or Mastercard is there for business. Yes, a surety can charge an ad hoc fee in the fiqh, but it is monstrous to believe that standing as guarantor can be converted into a millionaire business!
Moreover, it is trite law that the principal debtor’s obligation is not discharged by the mere conclusion of the suretyship agreement, but only by the surety’s fulfilment of such obligation. But how do I know what the card issuer such as Standard Bank does vis-à-vis Herrods, El Corte Inglés, etc?
Fourthly, I can also use the first accused purely in order to cash money, say overseas, and so I will never contract any primary obligation with any merchant / creditor, let alone give rise to an ancillary obligation.
Further to all of that, any agreement for the issuance of the first accused is never phrased by the issuing entity in terms of a suretyship contract. Strange? Certainly not.
In short, judge, equating an agreement to issue accused number 1 to a suretyship is a misleading falsity.
c) Dr. Kahf and associates would like us to believe that, alternatively, it is an assignment of debt or hawālah, that is, a contract to transfer a debt from one person to another. They are saying that if the cardholder rents a Toyota motor vehicle from Avis by paying with his own specimen of the first accused, he then transfers the debt he owes to Avis to the issuing institution such as Standard Bank. That way, they suggest, liability is shifted from them cardholder to the card issuer.
If the effect is to discharge the debtor / assignor, i.e. the cardholder, from the debt he owes to the creditor / assignee, Avis in our example, it is fanciful since the cardholder is discharged from nothing. If the assignment of debt includes the condition that the cardholder remains liable for the debt, the hawālah turns more or less into a suretyship,
and we are back to the original point.
Of course, honourable judge, an assignment of debt occurs when parties have that in mind. Of course if I am issued with the first accused I have no intent to transfer any contingent future liability to the issuer, even before such liability arises. Of course an agreement issuing accused number one does not describe itself as an assignment of debt, Visa would never dream of writing down something so silly, so if it were one such assignment, it would be fraudulent by putting on paper the opposite of what parties have agreed on inter se. And of course I might never even contract a liability to a third party such as Nokia’s retail store in Denmark by using the first accused.
Therefore, the untenable argument that an agreement to issue the first accused is not forbidden because neither suretyship nor assignment of debts is forbidden in Islam, is shattered by the fact that it is in fact neither a kafālah nor a hawālah.
c) We have thus, I submit, established beyond reasonable doubt that an agreement bringing the first accused, this smart criminal, into existence, is neither a suretyship nor an assignment of debt.
It is a special type of lease of money, special because of the rolling credit facility. It is a lease for profit, most usurious, of a fungible such as money which is consumed and thus cannot be rented, unlike an apartment or a Toyota car + it is a form of creation, from nothing, of fictional bank money (and I’m going to define the term later, when arguing
the case against accused number 2), imposed on the members of the community by usurious banks with the collusion of fiscal nation-states; and one which is allowed by being required, based on the rules of fractional reserve banking, to only keep some 10% or less of physical debt money while creating the rest as fictional money.
If one gets hold of an agreement begetting the first accused, it does not define itself. It talks of use, liability for use, authority to debit one’s account, monthly payments, default, interest, finance charge, etc.
If it is not a lease of money, the closest it can be assimilated to would be the sale of money for money, fictional of course, which would be doubly usurious, as gold for gold or silver for silver (here dollars for dollars, or dollars / euros etc converted to South African rands) must be done i) strictly hand-to-hand with no deferment, whereas here the cardholder always delivers money later, and ii) without quantitative discrepancy between the two monetary countervalues, and here the issuer always receives more and the card holder always gives extra.
As the honourable judge can read on page 1 of bundle “CGC”, the one relating to our third accused in these proceedings, “it must be noted that the card should not be used for buying gold, silver, stocks, foreign currencies or withdrawing money in other currencies as such transactions are known as sarf, and in accordance with Islamic Law the exchange of two countercommodities must be physical and prompt”.
d) Honourable Judge, I refer you to page 7 of bundle “CC”. Even Shaykh Ibn ‘Uthaymīn, who is generally classified as a rigid so-called “Salafi” scholar, declares the use of the first accused harām, as it contains an inescapable usurious clause, which is an integral part of the contract for issuing such accused, and it is disingenuous to adumbrate the possibility of the cardholder being able to foresee with full confidence that in the future he will meet the payment on time. Is he in charge of the Decree?
Dr. Kahf tells us that the contract for issuing the first accused is a contract giving the choice to make ribā applicable or not to the cardholder.
Respectable judge, which contract is concluded for the purpose of giving somebody a choice? The contract that is concluded is simply one to issue a usurious instrument leasing money to the cardholder. The only “choice” is for a person to sign it and be issued with the first accused or not, or to refrain from signing it.
But even assuming that the cardholder, conscientiously, does not delay payment of his bills on the first accused, and honours them on due date regularly, what does it matter? He has concluded a usurious contract with the other party. First of all, he pays an array of usurious charges, annual fees etc, and even one blade of grass in favour of the issuer is tantamount to ribā. The honourable judge can look at the well-known hadīth transmitted on the authority of the noble Companion ‘Abdullāh b. Mas`ūd: “Allah has cursed
the one who consumes ribā, the one who gives it to others, the one who records it, and the one who witnesses it: All of them are equal in sin.
” The cardholder who pays his bills on time gives ribā to the issuer, say, Standard Bank, first because he pays at least fees and miscellaneous charges, and secondly because the money in question, an electronic signal and entry in the account books, is not real currency, it is a mere fiction created from nothing which does not exist. He also records by his signature the agreement on the said usury, plus there is the usury which is chargeable against him should he default, which is a possibility he cannot control since the Decree is not in his hand. He is thus cursed even if he pays his bills on the first accused without delay. He is cursed by Allah the Exalted, as the Messenger of Allah, Sallallāhu ‘alayhii wa-Sallam, cannot say a lie.
e) As regards the argument that the planetary use and acceptance of the first accused should lead us to infer its halāl nature, it is the same as saying that if wearing mini skirts or imposing taxes other than zakāt has become common all over the Muslim world, that is ipso facto an indicator of permissibility. Let’s move on.
f) Honourable judge, on page 9 of bundle “CC”, Shaykh ‘Abdu’l-Hamīd al-Azharī, the Imām of the Ottawa Mosque in Canada, gets the ruling of the impermissibility of the first accused right, but not necessarily through the right reasoning. He says that everyone who demands the first accused “is ready to pay interest, thus he freely approves of dealing with interest. Therefore, whenever one delays in any payment, he pays a certain percentage as interest. Merely signing such a contract is forbidden, since he clearly indicates that he approves of this transaction”.
Honourable judge, the illegality of the first accused has nothing to do with whether the cardholder approves or not. The law does not x-ray his state of mind. He might be ignorant, he might hate it with all his heart, but if it is usurious and forbidden it is usurious and forbidden, period.
Let us assume somebody were to come to me and say, ‘As a good Muslim you have to pay me 3 Krugerrand coins in exchange for some gold jewellery. I haven’t got the jewellery here with me. I’ll deliver it to you in one week’s time. Hand me the Krugerrands now so that I can use them as dowry for the woman I love, and Allah will reward you for helping your Muslim brother achieve happiness.’
This is usury, as it if gold for gold where delivery of one of the two exchanged varieties of gold, the jewellery, is deferred to a future time for performance. You do not even know it is usury, how can you approve of it? In fact, you think you are actually doing a hasanah. Does it matter? No, ribā it is and ribā it remains regardless of your approval of dealing in it or otherwise.
Honourable presiding officer, the classical fiqh seems to be really forgotten by scholars nowadays.
The ruling of our honourable fuqahā’ is quite well-known: If a contractual arrangement includes both halāl and harām, which is the best one can say in this case for accused number 1, assuming there is any halāl in the first accused, which I am not prepared to concede on the Sharī`ah’s behalf, the entire agreement is voided. If that is the case when one, say, sells whiskey together with a shirt in a single contract, what is the position with the non-severable usurious condition here which no way the card issuer would drop out of the contract, as it is the heart of that transaction? Go tell Standard Bank or American Express, ‘Please let us just take out the clause on interest.’ Standard Bank is not prepared to renounce such clause. The clause destroys the validity of a loan (or even sale) of money irrespective of anything else, as the absence of ribā is a condition sine qua non for the validity of such a transaction.
g) By now, honourable judge, we should have mastered the fact that the first accused is a medium to create and lease money at interest. If you lease something, the fee paid for renting it must be obligatorily known with certainty at the time of entering into the contract, or else the lease is invalid due to gharar or material want of knowledge about the quantity of the countervalue of the fee. You cannot say, ‘I’ll let out this house of mine and you shall pay $100 for every week of your occupancy of the same”, without demarcating the duration of such tenancy, as the parties do not know how much rental will be paid. Here, between interest lurking for late payment and charges imposed by the issuing institution, it is not known how much the holder of the first accused shall pay to the other party. Even assuming, therefore, that money could be leased, and of course it cannot, such a lease would be harām by the basic rules of lease.
h) More still, judge. Lease, unlike sale, does not transfer ownership of something, only its usufruct, and only temporarily so, not permanently. Our classical fuqahā’ have thus stated that a lease should not be stretched for too long a time. No 99 years’ lease-holding in Islam unlike Apartheid days, honourable judge. The issuer of the first accused, by converse, would like to lease money to all its customers for life, so long as they are solvent and pay, on time and, even better, out of time.
i) Let’s even say, as Dr. Kahf does, that we are confronting “a new transaction”, and we accept that the arch-rule of Islamic jurisprudence is that the root position in respect of every statement or act producing a legal effect is that it should be interpreted in such a manner as to give validity to it if at all possible.
Here one cannot, because of the multiple ribā involved.
Another relevant arch-rule states that if the purpose behind any deed or saying having legal effects cannot materialize, then such a thing cannot be countenanced as validated by the Law, and, if it factually occurs, it is null and void.
The purpose of the agreement is not to establish a suretyship or an assignment of debt, and an indeterminate lease of a fungible cannot actualize the effects of a valid lease.
The best the Muslims legalizing the first accused could say is that an agreement fathering this illegitimate child which is the first accused, is to make available to the cardholder sums of money to be repaid by him later, without even one single blade of grass added on any such sum. As that is not the case with such agreements, and it cannot in fact be the case, the Law could never have countenanced them as valid transactions, and, in Dār al-Islām, if any such agreement had been concluded, it would have been devoid of any legal effect.
There is plenty more I could say, but I do not want to occupy too much of this respectable tribunal’s time, the more so as the matter is so transparently clear. There are only a few loose ends to tie up before I conclude my argument against accused number 1.
j) Mufti Taqi Usmani validates the charging of a “reasonable lump sum” for the cardholder using cash withdrawal machines, so long as it is not an excuse for charging interest. First of all, it is obvious that Standard Bank does not care how you call such a charge, a fee for services or interest. The result is the same. Secondly, no one can determine what a reasonable lump sum would be (and the cardholder never negotiates such quantum with the issuer, unlike what contracting in Islam should be all about). Thirdly, as with annual fees, one is basically saying that, on the best conceptual scenario for the first accused, the lender entering into a contract of liberality is seeking to attract benefits for his self, which once more unmasks the usurious nature of the contract. Fourthly, Standard Bank or Albaraka Bank (it makes no difference), by exploiting the system of fractional reserve banking, is providing in the main a rolling credit facility for
supplying on lease money that does not exist, since only 10% to 0% of what it lends out needs to be kept as a cushion in its coffers. Mufti Taqi Usmani is thus saying that such bank can make money out of money, and additionally impose charges on the use of its money, which the banking system owns, while of course preserving its right to take action against defaulting cardholders.
k) I would like to highlight the fact that in none of these fatwas, including the ones I have attached to bundle “CC”, has the endorser of the Islamic validity of the first accused dared to say that the first accused is halāl. They are all full of roundabout phrases such as “there is nothing wrong with their use”, “they comply with the requirements of the Sharī`ah”, etc. Yet I have read other fatwas from the same scholars, and they have no qualms in using the Qur’ānic and Sunnah terminology of halāl and harām when they deal with other things such as keeping this fast or establishing that trust. Mufti Taqi Usmani will tell you that celebrating birthdays is harām. He does not say there “lacking compliance with the Law”. I leave it to the intelligence of the honourable judge to figure out why they are scared to make use of a certain direct Islamic terminology.
l) Convenience is not, in the fiqh, a recognized element for permitting what is forbidden and unjust, apart from the occurrence of plentiful credit card frauds and cloning of such as the first accused.
m) Finally, judge, I would like you to look at p. 11ff of bundle “CC”, containing the fatwā issued by Imām Syed in Ottawa, though I do not agree with his suggestion of using prepaid credit cards that can be loaded with only set amounts of electronic money, apart from the fact that no institution would be interested in issuing such a non-lucrative instrument.
There are however remarks from kuffār below the fatwā, under the heading “Comments”, which are worth alone the ticket to many a comedy or the cover price of an annual subscription to the Mad magazine.
There is the fellow who says we Muslims are greedy as we want money without cost, whereas the Bible allegedly condemns only excessive interest to poor people (comment 1, judge), though it is well known that the Bible nowhere states that, in fact, ‘Īsā, peace upon him, is said to have angrily thrown the merchants practicing usury out of the Temple; there is the person who calls us Muslims “clowns” for possibly advocating cash only, and I love to be one of such clowns (comment 2). This is also a conformation of what Allah says in Sūrah al-Baqarah, that they say «innama’l-bay`u mithlur-ribā (sale is akin to ribā)», and not the other way round, because they consider the root legal contract the one of ribā; a third individual praises the Catholic essayist Hilaire Belloc, yes, the author of “The House of Commons”, for castigating the Islamic view on usury which “forbids many loans that are useful” (comment 3), while yet another commentator feels that usury is not as demeaning as jizyah (comment 6), which the kuffār are already afraid to pay to us even before we have the power to exact it, imagine then when we do
have such muscle.
Anyway, the honourable judge will be able to pick up a cornucopia of rare and entertaining jewels of the grotesque as he goes through pages 10 to 15 of bundle “CC”.
n) In conclusion, I submit that accused number 1, Mr. Credit Card, ought to be convicted of a most un-Islamic nature, which already automatically means wearing the donkey’s hat in front of the public assembled in this courtroom, and that he should be punished with a stiff sentence as a strong deterrence against further intrusion of usury in our Abode of Islam, which sentence I leave it up to the wise discretion of the honourable judge. Unfortunately, all of that will have to take place in absentia for the time being.’
The judge: ‘I think we should adjourn for five to ten minutes, and then Mr. Shabrakhītī shall address me on the alleged Islamic innocence of accused number 2.’
‘As the court pleases’, both Shaykh ash-Shafshawānī and Shaykh ash-Shabrakhītī declare in unison.
The judge (after the short adjournment and the orderly restoring silence in the courtroom): “You can address me, Mr. Shabrakhītī.’


The defence of accused 2, Shariah Islamic Credit Card
Presented on her behalf by: Shaykh ash-Shabrakhītī


‘I – Honourable judge, my client is flabbergasted that she should be arraigned for trial, when in fact she deserves a reward for eradicating the usury practiced by the first accused. It is precisely out of concern for such ribā that she developed into the nice human person I submit she is.
II – My client, which is a full member of the Association of Islamic Finance Institutions (AIFI), is aware that the issuance of accused number one pursuant to a contract granting the cardholder the right to revolving credit terms involving ribā is prohibited, due to the fact that taking or giving something such as services or money is itself prohibited if tainted by usury.
There is nothing, however, that renders it impermissible to issue a credit card free from ribā, which is what my client is. Accused number 1 charges some 42% interest per annum, that is, around 3,5% per month (and compounded interest on top of that) in Western countries, let alone here in South Africa where the interest rate is so dismally high. My client, on the contrary, is ribā-free, as I shall explain shortly.
Indeed, it has been declared permissible by the fatwā, contained in bundle “SICC”, issued by Dewan Syari’ah Nasional, numbered 54/DSN-MUI ….’.
‘DSN and then?’, the judge looking down at his notepad asks.
‘DSN-MUI/X/2006.’
Shaykh ash-Shafshawānī pounces on: ‘Has that fatwā used the word permissible or halāl?’
‘Permissible’, Shaykh ash-Shabrakhītī replies. ‘Can the honourable judge restrain my learned colleague from stealing the scene?’.
The judge: ‘Mr. Shafshawānī, we are not in a secular court here.’
Shaykh ash-Shafshawānī: ‘I’m indebted to the honourable presiding officer.’
‘Mr. Shabrakhītī, you can go on.’
‘As it pleases this court.’
III – Honourable judge, a credit card is a new instrument. Islam is not something immutable. Life moves on. We can accept new phenomena.
There is nothing wrong with credit cards as such.
What is a credit card? It is simply a revolving credit facility within the credit limit and credit period as determined by the card issuer. It is also a convenient means of payment.
The issuer of the second accused is called musdir al-bitāqah, the cardholder hāmil al-al-bitāqah, and the card-accepting merchant tājir (meaning merchant) or qābil al-al-bitāqah (meaning the one doing the act of accepting accused number 2).
The merchant, say, Herrods, pays to my client’s issuer a fee, called merchant fee or ujrah, as payment to my client’s issuer which acts as an agent / intermediary (simsār), a middleman, that is, bringing Herrods and the cardholder together; one that also engages in marketing on the merchant’s behalf; and, finally, a billing payment administrator. As such, my client’s issuer is rightfully entitled to receive 3% profit of any purchase made by the cardholder from a merchant such as Herrods.
With a credit card that is not sharī`ah-compliant, as with accused number 1, there is a free credit period during which the cardholder should pay the amount due, failing which he can still pay it but with interest charged against his account; and no free credit period exists in the event of a withdrawal.
My client, on the other hand, is indeed sharī`ah-compliant.
IV – My client, as every good sharī`ah credit card would be, is, yes, similar to a conventional credit card, but one that provides no interest-bearing revolving credit facility. In other words, the cardholder pays no interest for being allowed to pay off his debts in instalments.
Moreover, the cardholder may not use my client for purposes prohibited by the sharī`ah, such as organizing a matriculation ball where liquor is consumed or people dance to Lionel Ritchie’s tunes or some hip-hop opprobrium; if he does so, my client’s issuer reserves its right to withdraw such a holder’s card.
V. My learned colleague, I submit, clearly struggled to properly label a credit card. To facilitate understanding, let me explain to this venerable tribunal what my client is.
My client uses the lease system of Islamic contract generically, or ‘aqd. It is not, and I stress not, a loan contract as provided by a conventional credit card issuer.
This Islamic contract or ‘aqd, which is a novel contract for the age, sui generis, of its own unique kind, that is, is a judicious amalgam of three known Islamic contracts in one:
i) Ijārah (= letting and hiring of services);
ii) Kafālah (= suretyship or guarantee, as it variously called in different countries);
iii) Qard (= loan).

Let me know particularize my statement:
My client is issued, say, by Master Card or Visa International. An Islamic bank, which is the typical issuer of my client, uses on behalf of its customers the services of such an international organization as Master Card or Visa, which is a service provider. For using those services, which are naturally not gratuitous, my client’s issuer is entitled to charge the cardholder an annual fee or ujrah as quid pro quo for them. That is the ijārah part of this Islamic lease system, and what is wrong with ijārah in the sharī`ah?
The cardholder goes to merchants like Herrods or Avis, and purchases goods or services through the medium of my client. He thus contracts obligations to pay the relevant amounts to those merchants or service providers. Each such obligation to pay is a dayn, an incorporeal property obligation, a debt stored in what we call in the fiqh the cardholder’s dhimmah. Who guarantees the fulfilment of those obligations arising from the transactions between cardholder and merchant, or from any cash withdrawal from banks other than the ATM of the Islamic bank that issued my client? It is the issuer of my client that acts as such surety or guarantor.
In the sharī`ah, one can provide suretyship in exchange for a fee (kafālah bi-ujrah), which is a kind of ijārah or agency / wakālah for a fee instead of being a gratuitous one. Both are acceptable in the sharī`ah, for free or for fee.
Thirdly, and finally, the cardholder withdraws money from the bank issuing my client or from its ATM, and that is done on the basis that my client’s issuer acts as the lender (muqrid), while the cardholder is the borrower or muqtarid of such cash amounts. The qard or loan is defined in the sharī`ah as a contract in terms of which a proprietary asset is handed by x to y as an act of attaining nearness to Allah, for y to benefit by it and be later given the choice of refunding such asset itself or the like thereof, the latter being almost invariably the case with money. Accordingly, the cardholder is obliged to return to my client’s issuer the same amount of funds he has thus withdrawn. There is then a fair administration fee for the Islamic bank customer using the service of such bank or its ATM machine in order to withdraw cash, which is however in a fixed amount. It does not vary with the variance of the amounts thus withdrawn, hence it is a precisely known fee in a valid ijārah, of which more shortly. I thus submit that such a fee is not being charged as a pretext for collecting interest, to paraphrase the learned words of Mufti Taqi Usmani.
VI – The institution that issues my client is, I submit, duly entitled to charge a commission to the party who accepts her, at a percentage (3%) of the purchase price of the items and services, such as a DVD recorder from Games which has been purchased using the credit card, or even the fee for renting a van and a driver to transport one’s office furniture to new premises.
I further submit that, sharī`ah-wise, it is perfectly in order for my client’s issuer to charge a cardholder membership fees (which my client calls rusūm al-‘udwiyyah, everything is in Arabic as the respectable presiding officer can notice), renewal fees and replacement fees, as it provides useful services to such cardholder. That is so by the rules of what we call ijārah, respectable judge: The exchange of the usufruct of some services, such as repairing the leaking engine of one’s automobile, for a fee.
We already alluded to the fact that there is nothing objectionable, moreover, in charging the cardholder a flat service fee for cash withdrawal (called rasm sahb an-nuqūd) that is proportionate to the service offered in allowing him to draw cash at his convenience, as opposed to a fee varying with the variance of the amounts withdrawn, for the latter would be an irregular ijārah, since the fee or ujrah charged would be unknown at the time of concluding the contract issuing my client to a cardholder.
When a cardholder uses my client, judge, he can withdraw an amount of cash within the limit of his available funds. That is ok with all and sundry.
The offence perpetrated by accused number 1 was to charge interest when drawing out more than the sum-total of available funds. My client’s issuer, instead, either precludes the usage of my client above the set credit limit, or it allows the holder to exceed his funds by prior agreement with her issuer subject to penalty payments, but without charging any interest. No violation of the sharī`ah is thus envisaged.
VII – I now move, judge, to the issue of late payment.
When that happens, accused number 1 would criminally charge interest. My client, a dutiful Muslim who cannot comprehend how she has been brought to this honourable court to answer a case in the first place, does not do so.
If the card holder is late in payment, my client’s issuer simply charges him a ta`wīd or compensation that indemnifies it for the expenses incurred by it resulting from the cardholder’s non-payment on due date.
Alternatively, my client’s issuer can charge a late payment fee around 3% of the outstanding balance, to be given in charity.
My client should thus be honoured for disallowing extravagant use of credit, and encouraging the noble action of sadaqah, which, as the honourable judge knows, is one of the keys opening the seven gates of the Garden.
VIII. Based among other things on the foregoing, I plead that this honourable court acquits my client of this most groundless allegation of un-Islamic character. It goes without saying that my client reserves her full rights to seek redress for the attempted tarnishing of her Islamic repu …’.
The judge intervenes: ‘Mr. Shabrakhītī, we are only dealing here with the criminal case against your client. Any civil claim against the Public Prosecutor’s Office of the Emirate would have to be processed at the special Tribunal for the Redressing of Administrative Wrongs. We are not sitting at a session of any Mahkamah al-Mazālim here, you know that perfectly well.’
Shaykh ash-Shabrakhītī: ‘I’m indebted to the honourable judge for his timely reminder. I have nothing further to add.’
‘Mr. Shafshawānī do you need a break or are you ready to present your counter-argument?’.
‘I am fully ready, judge.’
‘By the way, it is clear that we shall have no time to hear oral argument against the third accused, Mrs. Cordoba Gold Card. Would it be acceptable if I just went through your respective heads of argument on that count of un-Islamic nature, and rule on the matter in terms of what is contained in those papers?’.
Shaykh ash- Shafshawānī: ‘I have no objection to that, the more so as the case against accused number 3 is somewhat lighter comparatively.’
‘That would be fine with me, too’, Shaykh ash-Shabrakhītī added.
‘Excellent. You may proceed, Mr. Shafshawānī.

The prosecution’s case against accused 2, Shariah Islamic Credit Card
Presented on the Sharī`ah’s behalf by: Shaykh ash-Shafshawānī

 

I am indeed indebted to the honourable judge.
A – It has by now become clear to you, judge, that the second accused, too, is nothing but 1) a combination of a lease of money, something unheard of in the fiqh and utterly harām as money cannot be lent, and 2) the origination into virtual existence of money, most of it fictional, and a little of it a debt in the form of zero-worth paper, as the Islamic banks that issue accused number 2 make use of central bank money fractional reserve banking just as much as so-termed “conventional” banks do. Such unacceptable money is called bank money or fiat money because it entirely relies for its acceptance on the public’s faith in it. “In God we trust” has been replaced by “in the banks we trust”.
Such money is no less a fantasy than the ostensible slithering snakes conjured up by the magicians’ rods at the time of Sayyidunā Mūsā, peace upon him.
It goes without saying that the second accused’s issuers, while calling themselves IFI’s, are fully enmeshed in the usury of banking, the usury of creating and manipulating the supply of magic or debt as money, and the usury of leasing money at a profit, though money, like an apple, is something that is consumed and, puff!, it disappears, it is not a rentable item.
Even my learned colleague referred to the second accused as a “lease system” which he called ‘aqd. This thing of giving Arabic names to modern usurious transactions is as odious, I submit, as the reference to pure Islamic contracts such as ijārah or kafālah that are viewed through the distorted lenses of pro-ribā attitudes.
And the issuers of the second accused proudly pay for the services of Visa International or Master Card, and are proud members of international credit card regulatory organizations, as it is clear from what is found in bundle “SICC”.
Let us remember what my learned colleague said about the qard scheme of the composite contract making up accused number 2: The cardholder borrows sums of money it later has to refund to the card issuer. The latter, the IFI that issued the second accused, is saying, ‘I am the lessor of the money created from nothing by the central bank, and I am sub-letting it to you at a heavy cost. Once you finish using it, return it to me, its primary lessor, as I need to liquidate my dues to its legitimate owner, the central bank.’
In addition, because of fractional reserve banking, if sum x is in its coffers, it can lease that amount so many times more by inter alia issuing the second accused to several customers, thousands, millions, billions (a gigantic web of sub-lessees).
To show succinctly how craftily criminal this anti-Islamic fraud is, we have said that not a single blade of grass can be added in our Dīn to the amount to be refunded by a borrower. Yet here the borrower has to give the benefit of a cash withdrawal fee to the lender, which is ribā despite the semantics we have seen even Mufti Taqi Usmani employ. The kuffār, who are more honest, call a spade a spade. It matters not that such charge is included in the first contract of the 3-contract package, the one the second accused’s advocates term the ijārah part. What has the issuer of the second accused advanced as self-exculpation? It is saying that the charging of fees for using the second accused relates, not to the loan segment of the composite transaction, but to the ijārah one. How lovely, honourable judge!
B – Part two of my argument is that the misleading IFI has loudly said, ‘my ‘aqd is not a loan with interest like a conventional credit card agreement’, it is a unique brand of Islamic contracts, fresh from the oven, which we carved out of three separate contracts in the fiqh.
Honourable judge, firstly, the Lawgiver has forbidden that profit should be made by folding up two or more transactions in one, for that leads to injustice, as in this case where the rich, in control of Islamic banks issuing the second accused, become richer by collecting funds from a large pool of customers, strictly wealthy of course, as the poor are excluded.
The whole concept of rolling credit facility, indeed, means that, in one contractual document and at one contractual session, thousands of agreements and transactions pursuant to them are folded together, stretching to profit being made for years on end through that one instance of offer and acceptance. As if a cow fell pregnant once, and every day calves came out of its womb.
Secondly, the fiqh instructs us to go beyond the mere letter so as to examine the intention and purposeful orientation of the parties, and the result produced by a transaction. We are not Pharisees like those living at the time of Sayyidunā ‘Īsā, peace upon him. The fiqh must be approached purposively, from the visual point of the beneficial interests of Allah’s slaves, not formalistically: Al-‘ibrah bi’l-maqāsid, not so?
What the three-transactions in one the issuers of the second accused have concocted amounts to simply represent a usurious lease of what cannot be leased, money, and the creation of money that is not money in Islam, thus pocketing an excess profit from a huge number of ignorant Muslims = Manifold ribā.
Ignorance of the Law, judge, is no excuse. Ask the people of the remembrance and the reminder if you do not know, Allah says twice in His Noble Book.
This tripartite agreement to which they have given the generic term of ‘aqd, as if bleached with some Sunlight washing substance, is thus nothing but an evil juristic ruse to circumvent the prohibition of usury by Allah and His Messenger, Sallallāhu ‘alayhi wa-Sallam.
By the way, respectable judge, I have noticed that my learned colleague is not relying on the hackneyed cliché that the harām is halāl because of some overwhelming darūrah or emergency / compelling necessity existing contingently for a temporary period, as with a person coerced by the need to preserve his life to gulp down some wine when he is chocking to death and there is nothing but a glass of khamr within his reach on the counter desk by Baglio’s Gelateria by Mandela’s Square in Sandton.
Stripped of such last veil of shame (which is found in a second fatwā by Mufti Taqi Usmani, encountered on page 6 of bundle “CC” relating to accused number one whom we have tried in absentia), my learned colleague’s argument is that the second accused is, as of itself, sharī`ah-compliant, as it is said nowadays.
C – The ijārah part of this freshly minted contract, I submit, is laughable.
An Islamic bank issuing the second accused is a financier, full stop. The idea is being sold to us here that it also operates as a trader bringing its customer x and Herrods together and mediating a sale contract between them, as if it is involved on the floor, in the marketplace, as opposed to leasing money out from office blocks, and as if x was not aware of Herrods’ or Virgin Stores’ existence on his own or capable of personally approaching any such retail outlet with real money whereby to fund his purchase of three sets of elegant trousers.
Even more risible, I submit, is the idea that such an IFI is entitled to get an ujrah or fee for “marketing” goods and services purchased with the second accused. What marketing does Albaraka Bank or Oasis engage in? More intelligible, at least, is the charging of a fee for billing payment, called tashīl ad-dayn, basically, debt collection, as the issuer of the second accused is a financier dealing with debts through its many clerical workers hosted in nicely air-conditioned top quality buildings.
As for the fees, membership, renewal, etc, they are all extra usurious charges flowing from the illegal lease of money by the IFI, and not quid pro quos for a productive element of society offering normal lawful services to the members of the community at large, such as an electrician or an aircraft carrier. In other words, not only I slap you with
the usurious lease of money, but I add ribā on that ribā, too.
Remember, honourable judge, what that kāfir said in his comment on the opinion of the Imām from Ottawa, how scandalous of these Muslims to covet our harām money at no cost to them? That is exactly what the IFI’s are saying to their fellow Muslim customers.
C – It is my additional submission, judge, that the fabrication of a suretyship agreement in this context has already been debunked in the course of the case against the first accused. That takes care of the kafālah part of the three-headed monster which is the second accused presently sitting in the dock in front of your eyes, judge, with her smug and insolent mien.
As for the loan section of it, I would like to remind the honourable judge that a loan is defined as a contract of liberality by which one seeks to attain nearness to Allah. Here, the “borrowing” of fiat (paper) reserves of bank money by withdrawing cash from an ATM through the medium of the second accused is part and parcel of the huge usurious profit sought out of money-leasing by the IFI, lender-cum-surety-cum-middleman-cum-marketer-cum debt collector.
D – It gets even funnier, honourable judge, when the IFI issuing this accused, which I submit is only done in order to wash away its guilt about engaging in compound ribā, monitors the use (by the sub-lessee, the cardholder) of the money he is alleged to “own”,
and possibly castigates him if it finds that the second accused has used the card to buy a bottle of brandy, which in my submission is less harmful as an intoxicant than the second accused itself. After all, if you, judge, lend me $500, what can you do if I fritter that sum away in a casino?
But if I am the owner or lessor of the bank or fiat money which I am only leasing out or sub-letting (as the case might be) to another persona, then I can raise my voice as any owner or primary lessor would do when stipulating conditions of use, is that not so?
E – A bigger joke: The second accused is an instrument of creating and leasing credit, which is what is destroying the ummah, mankind and planet earth, and yet the issuer of the second accused has the brazen audacity of telling us Muslims that it encourages good management of wealth and discourages overspending by setting a credit limit (which thing in any event does not prevent it from agreeing to let the cardholder exceed it, if of course such a cardholder is rich).
F – We have already seen, honourable judge, that the financial institution, as owner or primary lessor of the money, is its lessor to the cardholder who is the lessee or sub-lessee thereof. He has possession of the leased quantum of bank or fiat money, and possession is a factual reality. A thief, too, can possess a property. Ownership, by contrast, is a legal reality, and the most extensive real right one can hold and exercise over a property.
It is trite law that, in the fiqh of bay`, the prototype of lawful contracts for the transfer of goods, the two parties must own their respective countervalues, sale article and purchase price, as bay` consists in the reciprocal transfer of ownership over the exchanged countervalues, and you cannot pass ownership unless you are the owner of what you transfer to the other party [That is incidentally the reason, honourable judge, why IFI had to muster and master legal acrobatics in order to manufacture a “finance murābahah” contract that might avoid the accusation of “selling” something prior to acquiring ownership of it].
In bay`, each party buys and sells something at the same time. Ibn Juzayy lists the requirement of ownership of the respective countervalues (= the two parties must be mālikayn, each, that is, the owner or mālik of the countervalue he seeks to transfer to the other party), as being the second foundational rukn or pillar of a lawful sale in Islam.
The apparent exception to the rule is in the fiqh what we call bay` al-fudūlī, i.e. a sale by an “officious” agent, who is contrasted with an “official” agent who truly has a mandate (general or specific) from the principal to sell the countervalue concerned. The officious agent is merely presumed to have title over the property he is selling, either on the assumption that he is the owner thereof or that he has a mandate to sell it as the agent for his principal the owner. If we take by Imam ash-Shāfi`ī, may Allah be pleased with him, there is no problem, as he declares such a sale invalid.
Mālik says it is suspended in its operation, and is only given effect to if the owner consents to its conclusion. If he does, the issue reverts to the reality of consent being there, albeit retrospectively so.
Since the cardholder does not own the money that is leased by the IFI, as with the second accused, one of the pillars of bay` is missing. Every transaction of sale entered into by transferring some fictional money owned by other than its seller, in return for goods purchased from a merchant, is thus irregular at source on that basis alone (Naturally, the IFI, too, rents the money from its sole owner the central bank).
One certainly cannot institutionalize the sale by an officious agent and turn it into an oddly permanent scenario. At the same time, among the several detailed clauses of a credit card agreement, such as the one enabling the second accused to circulate, surely one never finds a provision whereby the IFI (or “conventional” financier) constitutes the cardholder as its agent to sell the money to the merchants by using the second accused.
Assuming IFI’s admitted that credit cards were mere leases of money, they would probably take the safe route of inserting an agency clause in the relevant contract. That, in turn, would simply take us back, honourable judge, to the prohibition, in the fiqh, of making profit through more transactions rolled in one, of collating, that is, a number of transactions in a single polymorphic compound, a hybrid contractual form aiming at circumventing the Divine interdiction of usury, gharar, debt for a debt, etc.
If sale is the paradigmatic transactional unit for the movement of goods, ijārah is so in respect of the movement of services, which nowadays enjoys a comparatively higher share of economic activity.
As we, honourable judge, are all aware of, the same essential requirements of bay` apply to an ijārah. Such fact means that the owner of the monetary fee or ujrah must be the owner of such countervalue, just as much as the one transferring the usufruct of his human services (such as equipping a motorbike with a suitable engine or repairing a leaking geyser) or of a rented proprietary asset (be it a flat, a horse or a helicopter) has to fulfil the corresponding requirement of being the owner thereof. Once more, on that basis alone all ijārāt executed with leased money as part of the revolving facility called a credit card, or with this vicious second accused a so-called sharī`ah compliant card, are harām.
G – The penalty fees are undoubtedly other forms of ribawī or usurious gain. They are other names for interest. What is the extent of the cost of late payment to the IFI? Moreover, such IFI makes a fortune by being allowed to lease fictional money, so it is the Muslim community that should demand a colossal compensation for the ongoing theft practised by the IFI’s issuing the second accused and its likes.
The 3% penalty fee in sadaqah is even more comical, I submit. It is like the South African Muslims building toilets in a masjid with interest money.
Judge, if something you have earned is halāl, what do you do? You consume it, as we say, hanīan marī’an, with gusto and with blessing from your Lord. Why would you insist on quickly disposing of it in sadaqah? Because you know it is an unjust usurious charge exactly as a penalty fixed by any ordinary such credit card clause, be it at normal speed or an acceleration one. If I were to let a flat, and you pay me the rental late, I am simply a creditor for the amount you owe me so long as such obligation subsists as an un-liquidated one. This guilt-ridden sadaqah is like George Soros setting up bursaries for underprivileged children.
The second accused is innocent, Islamic? Honourable judge, what does Allah say of the situation when your debtor is in financial straits? To charge him penalty fees? Allah says in āyah 280 of Sūrah al-Baqarah, immediately after the āyāt wherein He declares war against ribā together with His Messenger, Sallallāhu ‘alayhi wa-Sallam: «If someone is in difficult circumstances, there should be a deferral until things are easier. But making free gift of it would be better for you if you only knew».
This, judge, is what a Muslim does, not money-grabbing greed.
H – Honourable judge, my learned colleague has misleadingly failed to take this honourable court into his full confidence by refusing to bring one important aspect to its notice.
Any IFI issuing the second accused might oblige the cardholder to deposit a sum of money as a guarantee, exactly like so-called “conventional” banks would do in one form or another; and it might declare that such amount is not available for use by the cardholder. In that case, the IFI will invest the money in a mudārabah, a rather compulsory form of partnership, judge, one allegedly for the benefit of the cardholder, though of course a specific percentage of any profit goes to the Islamic bank in question. In that way, the IFI makes more money out of the leasing of money to its customer.
Moreover, the IFI puts all the funds invested in these mudārabāt together, in one undifferentiated kit, contrary to the requirements of the fiqh, and one does not know which venture is which, and whose money …’.
The judge interjects: ‘One moment, this name is familiar. Mr. Lexar, have you got the full roll in front of you?’.
‘Yes, judge.’
‘Read out the list of the accused waiting for trial, please.’
‘Honourable judge, there is Mr. Capitalism, Mr. Anti-madhhab, Mrs. Democracy, Mr. Spiderman, Mr. Taxation, Mr. and Mrs. Share, Misters Computer Games, Mrs. Finance Murābahah, Mr. Avatar, Mr. Stock Exchange, Mrs. Music, Mr. Bank & Mr. Bank, Ms. Selena Gomez …’.
‘Who is this Selena Gomez?’.
‘She is a popular TV character, judge.’
‘Ah, I see. Go on.’
‘… Well, there is Ms. Selena Gomez, Mr. Supermarket, Mrs. Finance Mudārabah, Mr. Imperialism …’.
‘Fine, Mr. Lexar, thank you. I recalled correctly. Mr. Shafshawānī, there is going to be a full case against IFI Mudārabah, so could you please hold back your comments on that until the relevant date of such other trial arrives?’.
‘I’ll do so, honourable judge.’
‘You may proceed.’
I – Honourable judge, the second accused is an instrument of ribā. The issuer thereof relishes its full participation in the same system of usury that is financing the plundering of Islamic lands and the enslavement of us Muslims. Why? The Prophet, Sallallāhu ‘alayhi wa-Sallam, has foretold that the Muslim ummah shall become edible food easily partaken of by kuffār due to two things, love for wealth and fear of death. Those issuing the second accused have an avid love for wealth at any cost, judge. And he, Sallallāhu ‘alayhi wa-Sallam, has likewise presaged the Muslims following the jews and christians right into their lizards’ holes, as with these so-called Islamic banks, Islamic insurance, Islamic credit cards …’.
The judge steps in: ‘But he, Sallallāhu ‘alayhi wa-Sallam, has also guaranteed that one group of his nation shall always be victorious on and by the truth.’
‘Nothing but the truth has ever emanated from the best of creation, Sallallāhu ‘alayhi wa-Sallam. Because of what you just mentioned, judge, we can still witness the courageous undertaking of arraigning such as the second accused here for trial.’
‘What relief are you praying for?’.
‘Judge, the second accused is camouflaged ribā. The first accused is a product of kufr and ought to be punished as such, but the second one is the product of nifāq. The Prophet, Sallallāhu ‘alayhi wa-Sallam, has anticipated that when the Hour approaches, every tribe shall be headed by its munāfiqūn. I thus pray that this honourable court convicts the second accused of being most un-Islamic, with the automatic imposition of the penalty of wearing a hat with donkey’s ears here in public, and punishes her, at his discretion, more
painfully than the first accused, just as in the Hereafter the practitioners of nifāq shall reside in the lower echelons of the Fire, though we hope for tawbah to issue forth from all the people involved in profiting by the second accused or legalizing it. The respectable judge ought accordingly to sentence the second accused to a number of repeated readings aloud of the five kalimāt, as well as some 33 lashes at the very least. I am through.’
‘Thank you very much to both of you for your contribution. I shall retreat to my chambers to give thought to this matter prior to my coming back to court for delivery of the judgment. Mr. Shafshawānī, by the way, have you got the referencing of that Prophetic narration you mentioned about who will head tribes close to the Hour?’.
‘For sure, judge. It has been reported by at-Tabarānī on the authority of ‘Abdullāh b. Mas`d , and Hāfiz Jalālud-Dīn as-Suyūtī has quoted it in his two books Jam` al-Jawāmi` and Al-Khasā’is al-Kubrā.’
‘Thanks a lot. The court adjourns.’
Mr. Lecter: ‘Silence in court.’


The case against accused 3, Mrs. Cordoba Gold Card
Heads of argument in her defence from: Shaykh ash-Shabrakhītī


“The full name of the third accused is Cordoba Gold CashPlus prepaid MasterCard.
The scheme complies with the requirements of the sharī`ah because of the
following:
1. This is how the third accused operates: The user first purchases the third accused from the Cordoba Financial Group for a small price which contributes to the administration costs of processing the user’s application, the opening of a bank account with the American Express Bank, the costs of producing the third accused, and other administrative functions.
Once the third accused is purchased, the cardholder must top-up the third accused at a top-up point. The value of the top-up is deposited into the cardholder’s bank account at the AFL Bank within 24 hours. AFL bank is a specific vehicle set up for this purpose, and is regulated by the Bank of England. This bank account is an escrow account and AFL Bank therefore treats it as a trust - it is shown on the bank’s balance sheet as an amount due to a specific individual, whereas other forms of current accounts are treated as loans made to the bank. As a trust, rather than a loan, AFL Bank is contractually obliged to segregate the underlying funds, and so may not use them to finance other projects or give loans to other clients. The third accused is thus eagerly solicitous to avoid engaging in usurious loans and indiscriminate financing.
When my client is used to make a purchase, the amount of the purchase along with a transaction fee will immediately be deducted from the escrow account (a similar process operates when cash is withdrawn). As a trust, the cardholder cannot use the second accused for purchases or withdrawals that exceed the balance held within his/her account, and any request to make a transaction the value of which is beyond that balance will be declined at the point of purchase, which is a plus compared to the second accused. Thus, no credit-based transaction can take place through the use of the third accused.
As a result of the above process, the balance of the trust account increases when topped-up and decreases when a purchase or money withdrawal occurs, the entire process taking the normal time frame required for processing transactions through the banking system.
The initial fees paid to obtain the third accused, as well as the transaction fees, do not render the product impermissible, as the sharī`ah allows a trustee to be paid to administer a trust, and I submit to this honourable tribunal that both MasterCard and Cordoba Financial Group, which are responsible for making the third accused available to customers, are acting as trustees in this context. The trust concept is widely accepted by Muslim scholars who have allowed for a trustee to be compensated for his effort.
2. An important issue to take note of in this context, it is submitted, is the requirement of funds in each account to be segregated as a trust for the sole access, and benefit, of the account holder. Unfortunately, the use of electronic money and pooled funds is all pervasive in the current financial system. Therefore, cardholders’ funds cannot be physically isolated in the way that my client’s issuers would prefer. Given this context, the minimum that the issuers of the third accused require is that the escrow balances not be included in the total assets of the bank which means that the bank can neither claim the right to use such funds nor can carry out activities based on such a claim.
As it is based upon the trust concept, the third accused complies with the requirements of the sharī`ah. My client’s issuers are aware that any alteration to the said contractual processes, as well as any contractual agreements or arrangements that contradict the essence of trust, may violate the (Islamic) legal permissibility of the third accused. Such violations include altering the account from a trust to a loan basis and/or use of the
trust money for financing other products or activities.
3. Because of that, the fatwā issued on 11th Rabi’ Al Thānī 1430/ 4th April 2009 by Shaikh Haitham Al-Haddād, Muslim Research and Development Foundation, www.mrdf.co.uk, which endorses the (Islamic) legal permissibility of the third accused, and which is echoed by the ruling to the same effect given by the International Islamic Fiqh Council belonging to the Organization of the Islamic Conference (OIC), in its statement: number 108 (2/12), is based on the desire to eschew the fact that using credit cards for purchasing items is completely impermissible as they are usury-based loans offered to the client. Such ruling would apply to the first accused here. Few can claim to be adequately certain of re-paying the loan before the given deadline so as not to incur any (interest-based) increase on the loan. A normal credit card contract contains a form of ribā which the credit-card provider stipulates to charge from the very outset, thereby rendering the contract impermissible in toto. The Messenger of Allah, Sallallāhu ‘alayhi wa-Sallam, said: “Muslims are bound by their conditions, except for conditions which forbid something that is permitted or permit something that is forbidden.” A large proportion of uninformed people who are now heavily indebted to credit card companies were initially confident that they could pay off their debts on time thereby avoiding compounded interest charges.
4. In conclusion, it is submitted that the third accused is fully Islamic and deserves an acquittal coupled with an apology”.


Heads of argument on behalf of the Sharī`ah by: Shaykh ash-Shafshawānī


“A. In the premises, I would like to emphasize the truth that, when it comes to the outward rulings of the fiqh, the criterion is purely the validity of a particular view, not the name and fame of the one holding it, however bombastic as Shaykh So-and-So or Organization Such-and-Such they might be.
As per the customary wont of IFI’s, the fatwā in bundle “CGC” does not expressly call the third accused halāl.
B. Secondly, it is submitted that, once again, we are facing here a usurious instrument to which some pseudo-Islamic varnish (such as a deposit of money with a trusted person) is expediently applied to please the conscience of the practitioners of ribā and bamboozle the public of uneducated Muslims.
What the issuer of the third accused, passionately holding the hand of the American Express Bank, does, is engagement in banking (including its “conventional type”), which is itself harām, dealing in the process with fictitious money and debt as money as done right across the banking sector, and by which it can lease bank money for profit. Hence, through the lease of such money to the cardholder, it can charge a usurious fee every time a transaction is entered into by the cardholder with a merchant or its like, or a cash withdrawal is made by the cardholder using the third accused, this plastic card, quite stiff and ugly on top of that, that pretends to represent money.
Because of its affiliation to the banking monopoly, AFL Bank, as a private subject, is authorized by the ultimate owner to lease a fungible for profit, whereas, as supposedly equal private Muslim subjects, my uncle, my kindest neighbour, my favourite dining companion and I cannot do so at all.
There are also the miscellaneous fees, the one for manufacturing such plastic cards of the devil, and a wide range of administrative charges, all connected to the unnatural lease of money.
C. In addition, no matter how much the issuer of the third accused underlines its attempt not to make it too obviously usurious, its proponents themselves acknowledge that no way, in a system of pervasive use of electronic money etc, there can be a genuine segregation of funds. At the end, the non-isolated funds in the relevant escrow accounts are to an extent pooled with others to finance more “conventionally usurious” loans or banking projects.
D. The Sharī`ah, on whose behalf these heads are being prepared, is for the umpteenth time dismayed at the use of classical juristic concepts and transactions to give the impression that the fiqh is being paid other than deceitful lip service to.
Here the issuers of the third accused toy with the valid scenario of the wadī`ah or deposit of money. In the fiqh, it is defined as a proprietary asset being deposited with another persona purely for the purpose of safeguarding it. Here, the issuer of the third accused is not receiving an asset as a trust from the depositor. It is collecting bank money so that it can lease it at a high profit, making money generate other money as a seed of apple fruit would. The “deposit” or “safeguarding” part is a façade.
Safeguarding what, moreover, given that all such money is a figment of the imagination which Muslims have been called upon to have faith in?
In the fiqh, one of the conditional requirements of the deposited asset is that it must be capable of being delivered (with certainty), and of course the holder of the third accused is unable to deliver any money when money is just a fiction people have lent virtual existence to.
Moreover, if there is a run on the IFI and its short supply of paper money and coins gets depleted, how, as alleged trustee with whom a monetary asset is deposited, would it be capable of returning it?
Besides, in our fiqh it is impermissible to use or lend the deposited asset without the consent of the depositor, or mix it with other assets similarly deposited for safekeeping, and even the fatwā in bundle “CGC” admits that that cannot be prevented.
An even bigger trick when propounding the comparison with the Islamic contract of wadī`ah is that the depositor is the owner of the deposited asset, and here the cardholder is no more than a (sub-)lessee of money.
It is shameless on the part of my learned colleague to argue that the IFI is receiving initial fees or transaction fees because of its safeguarding of an asset deposited with it as a trustee, as would be the case with the wadī`ah in Islam. The initial fees are charged before any deposit can possibly be made, as a fee for sub-letting money created out of nothing; and any transaction fee is not charged so that the “trustee” can preserve the existence of a deposited asset (which does not really exist in any case) in an integral form, but as “rental” for the usufruct of the money received from the IFI.
The said misleading fatwā, finally, deliberately refrains from mentioning the fact that the trustee with whom the asset (never conceived by our fuqahā’ as being at best a debt) is deposited for the sake of preserving it, can only receive a fee for such services a) if the depositor stipulates such a fee, and the holder of the third accused stipulates nothing, as he only signs a standard agreement form fully drafted and printed by the potent IFI; or b) if the prevailing custom, meaning a custom naturally developing between Muslims, not the custom of the kāfir banking system, points in the direction of acquiescing in payment of a fee for the safekeeping.
E. As a conclusive seal, I pray on behalf of the Sharī`ah that the third accused, too, be convicted of being most un-Islamic, made to wear the donkey’s hat, and chastised at the honourable judge’s discretion with an extensive punishment falling short of what the respectable presiding officer has hopefully decided to mete out against the more offensively transgressing second accused”.


Bundle “CC”


Using Credit Cards
By Mufti Taqi Usmani
POSTED: 15 MUHARRAM 1422, 9 APRIL 2001


Q.) 1- If the payments of the credit card bills are made to the Credit Card company on due date, whether its use for buying will be Halal or not?
2- If the payment is some times delayed and made with additional charges, what will be the Hukm?
3- If some one draws some cash from the Cash Machines against the limit he has been assigned by the credit card company, whether the use of this cash amount will be Halal?
Abdul Rehman
(Muhtamim Ma'had Al-Faqeer Al-Islami Pakistan)
 
A.) 1/2. The best way to avail of the services of a credit card company is to have a direct debit arrangement with the issuer of the card. It means that as soon as an amount is due on the card holder the isssuer receives it by debiting the card holder's account with it or any other bank. This is to eliminate the chances of the accrual of any interest on the payable amount in case of delay in payment.However, if direct debit arrangement is not possible for any reason purchasing through a credit card is permissible only when the card holder is fully confident that he will pay the bill to the issuer within the due date and there is no apprehension that any interest will accrue with delay in payment.
3. Drawing cash from a cash machine provided by the credit card company is allowed if no interest is charged for the cash drawing. The company may charge some reasonable lumpsum amount for providing the services of the machines provided that it is not made an excuse for charging interest.


Question
As-salamu `alaykum. Is it appropriate to use credit cards?


Answer
Wa `alaykum As-Salamu wa Rahmatullahi wa Barakatuh.

In the Name of Allah, Most Gracious, Most Merciful.

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

Dear questioner, thank you very much for having confidence in us, and we hope our efforts, which are purely for Allah's Sake, meet your expectations.

In Islam, there is nothing wrong with the use of credit cards as long as one does not delay paying the bills and pay the total amount on time.

Responding to the question, Dr. Muzammil Siddiqi, former president of the Islamic Society of North America, states the following:

"Using the credit card is like using the modern banking system. Most of the modern banks are interest-based and Muslims have to use them because interest free banks are not available. It is permissible to use the services of these banks without getting involved in interest.

In a similar way, it is permissible to use the credit cards without getting involved in Riba. Credit cards are a convenience. They help us to charge goods and services to the card account, without carrying too much cash all the time or tying the cash for a credit purpose. These cards are now universal and are used in Muslim countries as well. The card companies make money from annual fee and from commission they take from the establishments. Some companies give their credit card free of any annual fee, because they expect that may collect interest from those who will charge these cards and then they will pay interest on unpaid balance. However, one does not have to pay interest if one pays the card bills fully on time.

There is nothing un-Islamic in using this service as long as one does not delay paying the bills and pay the total amount on time. It is indeed haram to pay interest. However, one is allowed to use the credit cards to charge the amount that one can pay when the bill comes. But if one uses the card to borrow money on interest or to purchase what one cannot pay on time, then one is indulging in Riba which is forbidden in Islam."

You can also read:

Using Master Cards that Entail Extra Charges

If you have any further questions, please don't hesitate to write back!

May Allah guide you to the straight path, and guide you to that which pleases Him, Amen.
Allah Almighty knows best.


Country Of Origin : Austria

Fatawa Issuing Body : Islam OnLine
Author/Scholar : Muzammil siddiqi
Date Of Issue : 26/January/2006


Name of Questioner    muhammad   - Bangladesh
    Title    Is It Allowed to Use Credit Card?
    Question    In what sense credit card is halal, while you are taking money as a credit from a Riba-based bank, even though you pay them in full (so-called grace period), while Islam forbids involvement of a third person in a transaction, because every time you make a transaction, there is a third party getting paid, because of that transaction, and that is haram. We still hear some Sheikhs saying credit card is halal, can you define that in the light of Qur’an and Sunnah?
    Date    06/Jun/2002
    Topic    Finance & Banking

 

Answer     
 
In the Name of Allah, Most Gracious, Most Merciful.

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

Dear brother in Islam, we would like to thank you for showing keenness on knowing the teachings of Islam, and we appreciate the great confidence you have in us. We hope our efforts meet your expectations, yet we apologize for the late reply.

With regard to your question, Dr. Monzer Kahf, a prominent Muslim economist and counselor, answers:

“I can certainly define the credit card in the light of the Qur’an and Sunnah. As the Qur’an prohibited Riba, Sunnah also prohibited many immoral and/or unjust transactions, but my dear brother, there is no prohibition on transactions that involve third party! Did you get that from the Qur’an or Sunnah? Of course there are certain transactions that involve a third party which are forbidden not because they involve three persons, but because the essence of the transaction falls in the boundaries of prohibition. To give an example, a creditor’s giving a debtor a discount is permissible, but discounting a promissory note by the creditor at a third party, a bank, and the bank gets the face value on maturity is forbidden because this is interest.

On the other hand, a transfer of money and/or debts from one person to another at the face value is permissible, so is a guarantee given by a person to a third party for the repayment of a debt or guaranteeing the liability of another. And there are many examples of this kind.

The credit card is a new invention and Muslim scholars define it as either a guarantee given by the issuer to the seller who accepts it or as a transfer of the debt by the debtor to another party, the issuer. Hence, it falls within the permissible transactions. However, there are two problems, one for the issuer and the other for the user; this relates to the fact that the contract here usually contains an interest article if payment is delayed and if cash is withdrawn. Issuing such a card with this interest condition is not permissible in Shari’ah. Islamic banks can’t issue it with such a condition.

Accepting the credit card and using it is not the same, especially that it has become very convenient and it removes hardship. For instance, in most countries you book a room in a hotel or rent a car or make a plain reservation without a credit card. Notice that the interest condition is not essential in the credit card, it has an “if”: i.e. if you don’t pay within a certain time. But believe me it is real grace period, and the condition is invoked; and if you withdraw cash from a machine it is also invoked.

We certainly wish that the interest condition is not inserted in the contract, but unfortunately in most countries there are no Islamic institutions that issue such cards, and even those cards issued in some countries are not really satisfactory because they are limited in scope and usability. In other words you are not signing a loan contract with interest but you are signing a contract that gives you the choice to make the interest applied or not. Consequently, if you know for sure that you can use it without incurring any interest you make the interest clause useless and it is permissible to sign such a contract and use the card.”

Do keep in touch. If you have any other question, don't hesitate to contact us.

Read more: http://www.islamonline.net/servlet/Satellite?pagename=IslamOnline-English-Ask_Scholar/FatwaE/FatwaE&cid=1119503545252#ixzz13UGtwind


Re: Is Credit Card Allowed In Islam


Some scholars say:
It is permissible to make use of the credit card facility on condition payments to your account is made timeously to avoid paying interest.

http://www.askimam.org/fatwa/fatwa.p...2c13c6f6335e76

This is also the Fatwa of Mufti Taqi Uthmani saheb. (Al Balagh monthly)

The Islamic Fiqh Academy of India ruled that to get a credit card is not permissible because the transaction is an interest based one even though one may save himself from the interest. They say Halal and Haram is based on the transaction and this transaction is interest based. (Bank se jaari hone wale Mukhtalif card ke shari Ahkaam, Islamic Fiqh Academy 2007)

Mufti Taqi Uthmani says Credit card has become a necessity without which many transactions cannot be made therefore it will be permissible to use it on the condition that the payments are made before the due date to avoid interest.

And Allah knows best.


The ruling regarding using a credit card


*Please appropriately reference this fatwa to: www.fatwa-online.com, thankyou!*
Question: There are banks which provide their customers with a card called "Visa". This (card) then permits them (customers) to withdraw cash from the bank, even if they do not have sufficient funds in their account at the time. After a (specified) period of time, the customer is then required to pay back the money which he withdrew, and if he fails to do so before this period of time expires, the bank will then charge an extra fee in addition to the original amount withdrawn. This is in addition to the customer paying a (fixed) yearly fee to the bank for the use of this card. I request you to explain the ruling regarding the use of this card, and are there any specific conditions which need to exist if the use of the card was not permissible? (And) may Allaah reward you with good?
Response: This transaction is impermissible (haraam); this is because it consists of adhering (agreeing) to pay interest if the repayment is not done within the specified time (period), and this adherence (agreement) is not permissible. Even if a person believed or felt assured that he would make the repayment before the expiry of the time period, it is possible that circumstances could change rendering him unable to make the repayment within the specified time period. And since this is a matter of the future, a person (obviously) does not know what will happen in the future, so this transaction in this case is impermissible.
Shaykh Ibn 'Uthaymeen
Silsilah Kitaab ad-Da'wah (12), al-Fataawa - Volume 3, Page 120-121


Question: I have a question about VISA cards. I was watching Saudi TV yesterday and a sheikh said: “Even if we pay our VISA bill on time and we do not accumulate interest, the fact that we signed a contract agreeing on the condition that if we are late, we pay xx% interest, makes the VISA card haram,”
Do you advise me to get rid of my VISA card? I only have 1 for emergencies and when I travel… can you give me some advice please, should I cancel it and rely on Allah subhanahu wa ta’ala, or is having it an exception to living in this society?
I’ve read different opinions from people I don’t know, but I want to get your opinion inshallah.
Answer Sh. Khaled Abdel Hamid Alazhari: In the Name of Allah, the Most Gracious, the Most Merciful
Praise be to Allah(The Almighty), the Cherisher and the Sustainer of the worlds. Peace, prayers, and blessings be upon our illiterate Prophet Muhammad and his family and companions
I would like to thank you for the great confidence you place in me, and I implore Allah Almighty to help us serve His cause and render our work for His Sake. As for your Question : Using Credit card?
Introduction
Credit card contract has a conditional interest (Riba) clause.
Credit cards may be used to pay for purchases and to withdraw cash.
The Rule
Using Credit card has two opinion of thought in islam:
The First:
Using Credit card is permissible in Islam as long as one does not delay paying the bills and pay the total amount on time.
The Second:
Using Credit card is forbidden (haram) in Islam even if the user is certain that he will pay the bank within the time.
The first Opinion is based on that using the credit card is like using the modern banking system. Most of the modern banks are interest-based and Muslims have to use them because interest free banks are not available. It is permissible to use the services of these banks without getting involved in interest.
The second opinion base their ruling on hadith narrated by Ibn Mass’ood
“Allaah has cursed the one who consumes Riba (i.e. usury or interest), the one who gives it to others, the one who records it and the one who witnesses it (its transaction).” He said: “All of them are equal in sin.” [Muslim]
So, having a credit card and dealing with it, itself is surrounded by many prohibitions.
1.    Everyone who demands a credit card has to agree to the terms mentioned in the contract, i.e. that he is ready to pay interest, thus he freely approves of dealing with interest. Therefore, whenever one delays in any payment he pays a certain percentage as interest. Merely signing such a contract is forbidden, since this clearly indicates that he approves of this transaction.
2.    Very likely the one who has such a card is practically involved with interest whenever heshe delays a payment or not.
Sh. Khaled Abdel Hamid Alazhari’s Fatwa:
I conclude that it contains usury (RIBA) which is forbidden in Islam, so it should not be used.
The need and easiness in marketing by the internet is not a sound reason (darorah) that entitles you to enter a contract that involves Riba. You can solve this problem by using pre-credit card.It’s permissible because you spend your own money with the same benefits of using credit card without committing sins.
But if you have a sound reason or necessity (darorah) You can use them with two condition:
1.    Do not delay paying the bills and pay the total amount on time.
2.    Do not withdraw cash money.
And Allah knows Best
Sh. Khaled Abdel Hamid Alazhari Imam of Ottawa Mosque


Ottawa imam issues fatwa against credit cards


This is the kind of thing that leads financial institutions to make special accommodations for Sharia finance. "Ottawa Imam issues fatwa against credit cards," by Jennifer Green for Canwest News Service, February 18 (thanks to Twostellas):
In an economy awash in easy credit, Ottawa's leading imam is definitely swimming against the tide.
Imam Khaled Abdul-Hamid Syed has issued a fatwa against credit cards, even if they are paid off every month.
"I conclude that it contains usury ... which is forbidden in Islam, so it should not be used," Imam Syed said in a mass email to members of the city's main mosque.
Islam has always banned interest for the same reason usury is condemned in other faiths: It can sink debtors, even whole economies, as recent years have shown.
"It's to protect people from falling in a lot of debt," the imam said in an interview.
"Interest is demeaning to people," added Ismail Barreh, an MBA student at the University of Ottawa who sat in on the conversation. "They are in need, and then you can take advantage of them."
There are two schools of thought about credit cards among Islamic scholars. Some argue they are permissible as long as no interest is accrued, meaning bills must always be paid in full.
Others disagree, quoting one of the earliest religious authorities, Ibn Mass'ood: "Allah has cursed the one who consumes Riba [usury or interest], the one who gives it to others, the one who records it and the one who witnesses it.... All of them are equal in sin."
This group believes anyone who signs a contract for the card "is ready to pay interest, thus he freely approves of dealing with interest."...
Imam Syed replied in the mass email that she should rely instead on a prepaid credit card that can be loaded with set amounts. Cardholders can only spend what is on the card, and no interest is incurred.
In the interview, the imam stressed the fatwa is not binding, nor would every imam hold the same opinion.
"A fatwa is a religious decision, to tell people what their God loves, and what makes their God angry with them.... It is a religious decision to the person who asked."...
Posted by Robert on February 18, 2010 8:35 AM | 24 Comments


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24 Comments
 canasia_us | February 18, 2010 9:00 AM | Reply
There's only one reason Islam is against interest wrt credit cards; and interest in general. They want the money without cost to them. It's a form of greed.
The Bible does not specifically condemn interest but does condemn excessive interest, and interest charged to those who are in poverty.
 Comic Relief | February 18, 2010 9:18 AM | Reply
The "interest" or use fee that would be paid for a pre-paid card is mandatory (up front) and can not be avoided. If you pay the card off timely then it would be cheaper to go the credit card route, not pre-paid cards which, in effect, will mandatorily attach a fee (or interest if you will). So, unless these clowns are advocating cash only, their logic (or lack thereof) is confusing as it is with so many other things islamic.
 Virgil | February 18, 2010 9:19 AM | Reply
My opinion on usury is that elaborated by Aristotle and St. Thomas Aquinas (who are, in my humble opinion, two of the three greatest philosophers in history, the third being Plato). The Anglo-French Catholic essayist Hilaire Belloc wrote an excellent and insightful essay on usury, in which he condemns the practice, but also addresses the Muslims approach to usury which he criticizes as unintelligent "because it forbids many loans that are useful".
As far as this particular Ottawa imam is concerned, his objective isn't the merely limiting of usury (which I would have no problem with), but the complete Islamization of Western economic and political systems and to force financial institutions to cave to Islamic supremacy.
 gravenimage | February 18, 2010 9:24 AM | Reply
Islam has always banned interest for the same reason usury is condemned in other faiths: It can sink debtors, even whole economies, as recent years have shown.
"It's to protect people from falling in a lot of debt," the imam said in an interview.
....................
I'm not a big fan of the abuse of credit cards (I use cash or debit cards), and our only current debt is our mortgage.
But that is not what Shari'ah finance is about. CanWest is as credulous as most Western news services.
The irony is that many Shari'ah-compliant "interest-free" loans have fees that far exceed interest rates, bt tht's another issue.
more:
"Interest is demeaning to people," added Ismail Barreh, an MBA student at the University of Ottawa who sat in on the conversation. "They are in need, and then you can take advantage of them."
....................
Strange, isn't it, that squeezing Jizya out of non-Muslims is not considered "demeaning", not is ransoming kidnap victims, nor is the outright keeping of slaves.
And using Zakat to fund Jihad terrorism is just fine.
But moderate and reasonable interest . . . well.
 Hugh | February 18, 2010 9:48 AM | Reply
The payment of interest does indeed violate Islam. The person involved with interest violates it, no matter if it is he who gives or he who takes. But people are people, and there are always the whisperings of Shaytan, especially in the Western world, inveigling good Believers to do things that Islam does not permit. In order to lessen the amount of such Shaytan-whisperings, that are so demoralizing for Muslims, Western banks should simply tell Muslim customers that they can put their money for safekeeping in the banks, and the banks will not charge for this but, in the case of Muslims, will not be giving them interest either. For that would perforce make them collaborators in their own downfall. And that wouldn't be just. That wouldn't be right. That would be cruel.
Who could possibly object? On what theory?
 fairuzfan | February 18, 2010 11:30 AM | Reply
It's rather ironic that Muslim views on usury are actually closer to the classical true, Western view of the matter, as embodied in traditional Catholic thought, than what passes for standard American thinking today as mediated through the muddle of so-called enlightened self-interest of the so-called Enlightenment.
Catholic economic writer Brian McCall has written quite a bit in the past year, expounding upon how a myriad of economic calamities might well have been avoided or mitigated had we in the U.S. taken true classical Catholic thinking to heart instead of the rapacious nonsense that seems to pass for any amount of economic activity these days.
And if financial institutions seek to offer usury-free products to a market niche that disapproves of prevailing practices, that is wrong because of what, Mr. Spencer? Since it is Lent even for the Byzantine rite, Mr. Spencer, let all of us Catholics meditate upon how we might be able to lessen the prevalence of usury and its noxious effects on our societies. Perhaps it's time we Catholics should consider how we can emulate such efforts as this Islamic one.
 MBR replied to comment from fairuzfan | February 18, 2010 12:27 PM | Reply
Timur Kuran {"Islam and Mammon: The Economic Predicaments of Islamism" 2004) gives an excellent overview of this area.
If you can't access his book or his various articles in the academic journals there is plenty free online via a simple search. Daniel Pipes has usefully reviewed Kuran also.
 Hugh | February 18, 2010 2:17 PM | Reply
Timur Kuran has collaborated -- though not on the subject of Islam and Finance -- with Cass Sunstein, now the head of the Risk Management Office (name to that effect). And Cass Sunstein is one of the most likely candidates to replace Justice John Paul Stevens, after the latter retires, at or before the end of the Supreme Court's current term.
 pulsar182 | February 18, 2010 2:41 PM | Reply
For a small fee I will instruct Muslims how to bury their money in the back yard....
 MBR replied to comment from Hugh | February 18, 2010 2:50 PM | Reply
Hmmm... another 'power couple'?
In any (OIC-inspired?) move to control the internet I see Sunstein as the one to watch closely.
 MBR replied to comment from pulsar182 | February 18, 2010 3:05 PM | Reply
The Ottoman admirals at the naval battle of Lepanto could have done with your advice.
As described by Victor Davis Hanson, lacking both a banking system and relatives back home they could trust, they took their considerable fortunes on board, and almost to a man went down with their galleys, their slave rowers and their booty.
I'm waiting for the book to be written - "Islam and Trust".
Not only the lack of it endemic in Islamic societies but the way in which inter-personal and institutional trust in the West and elsewhere is being traded on, exploited and destroyed by Islam's interaction with non-Islamic societies.
 profitsbeard | February 18, 2010 6:15 PM | Reply
Islamic 'thought' on money is Bronze Age idiocy.
As if the value of currency were static.
Extortionate interest rates (15% and higher) would qualify as "usury", and are the kind the Mafia practices (and many current credit card companies have been allowed to emulate the Mob's outrageous rates due to a lax Congress), but common sensical rates (tied to inflation levels, if any) of 2-10% only guarantee that the loaner's money does not lose overall value (the missing part of the Islamic "equation" in this matter) by being in someone else's pocket for the time of the loan.
Plus, the loaner could have invested in tangible items like fine art, sports collectibles, antiques, rare books, etc. and made money that way, without helping his neighbors finance their own start-up businesses, home investments or improvements, etc., etc., all of which enriches the greater economy by circulating and not freezing (locking it in static tangibles) the money involved.
Islam's take on this complex matter is naive and superstitious and ridiculous.
And sounds like a radio rant by crackpot Ezra "Usury!" Pound from fascist Italy, circa 1943.
 Eastview | February 18, 2010 7:43 PM | Reply
Question to anyone: How do muslims buy property, e.g., homes? The usual way is through a home loan from a bank or other lending institution, which always incurs mortgage interest. Same concept for starting and operating a business. Anyone know if the procedures for an observant muslim differ, and if so, how, from normal Western practices?
 DhimmiNot | February 18, 2010 8:05 PM | Reply
An Islamic mortgage looks like this...
For a house on the market for $200,000, a Muslim would agree to buy it from his Muslim bank for $400,000.
His mortgage payments over 20 years would equal the $400,000 debt.
But no interest would be paid.
Everyone is happy.
 Eastview replied to comment from DhimmiNot | February 18, 2010 9:42 PM | Reply
That actually makes some sense, although it's nothing more than a crudely implemented mechanism for charging interest and calling it something else.
What about credit cards? Maybe the inability to come up with a similarly simple-minded scheme to avoid having to use the word "interest" is what's behind the fatwa.
 baest | February 18, 2010 10:08 PM | Reply
Hey, if any of these turkeys want to make me a 0% loan, I'm here. It'd be the first time they made themselves useful.
 champ replied to comment from profitsbeard | February 19, 2010 12:24 AM | Reply
Spot on, Profitsbeard!!
 dad | February 19, 2010 2:32 PM | Reply
When they Jihad the banks, they will get their asses kicked.
It is one thing to ragbag a woman after using her for a punching bag, because they just don't listen!
Maybe Hillary will divorce Bill, marry one of these Satans, and get a genuine burqua ragbag and a beating for herself.
She is letting in these Imams.
Why else do you need a burqua-bag, but to cover the beatings?
Let them go after an evil government controlling institution like a big bank, that is another.
The banks will get their pound of flesh, after all aren't our politicians indentured to them? They give money to both candidates to get them elected. Like as if they went against Monsanto? Monsanto would jihad their Muslim asses.
 FINISHWAHABI | February 19, 2010 3:14 PM | Reply
Now the Imam says how we spend ... tomorrow he will take control our life. Hard earned freedom that we cherish ... so many muslims left their native countries to have a good life in Canada ... Now this Imam wants to control their lives. "Fatwa should be - Imam you go back right now". He has no bloody business in Canada ... Do not impose your values on us.
 loup-garou | February 19, 2010 6:45 PM | Reply
GOD SAVE THE QUEEN,SORRY ALLAH SAVE THE QURAN..
 livingengine replied to comment from fairuzfan | February 20, 2010 12:44 PM | Reply
fairuzfan - I thought you told us you were a Jew.
 gravenimage replied to comment from fairuzfan | February 20, 2010 7:12 PM | Reply
"fairuzfan" wrote:
It's rather ironic that Muslim views on usury are actually closer to the classical true, Western view of the matter, as embodied in traditional Catholic thought, than what passes for standard American thinking today as mediated through the muddle of so-called enlightened self-interest of the so-called Enlightenment.
...................
Yes—we can avoid all these pesky credit meltdowns simply by returning to a medieval standard of living. I'm sure that would be just fine with every modern Westerner.
Europe first began to pull themselves out of the economic dark ages by using Jewish credit during the latter Middle Ages and the Renaissance.
Reasonable credit is a significant part of a healthy economic engine. The fact that Islam condemns even reasonable interest as "usury" is one major reason that most of the Muslim world is so backward economically—along, of course, with other nasty mental habits such as inshallah-fatalism, a wide-spread belief that hard work is for slaves, and a concurrent belief that pillage and the collection of Jizya are more noble than honestly earned income.
So-why do Westerners pay any attention whatsoever to Shari'ah compliant finance?
Three main reasons, I believe. Firstly, that most Westerners know little about the workings of finance, and never look too closely at what "interest-free" transactions often entail; that is, "fees" which amount to roughly the same amount as the interest would be in a conventional loan, or even more-in other words, it's smoke and mirrors and semantics.
Secondly, that the unearned wealth of Muslim states with oil somewhat obfuscates the essential poverty of the Muslim world.
Thirdly, the sense of helpless Multiculturalism is so strong in so much of the West today that many credulous people are all too willing to believe that returning to the financial practices of the Middle ages—or of 7th-century Arabia—are just what we need to address any fiscal excesses of our own.
There are many problems with the West's current financial situation, much of which can be traced to overspending, deferring difficult decisions, and magical thinking about money. *None* of these issues can be addressed by accepting any aspect of "Shari'ah compliant finance".
And, of course, none of the above addresses that biggest danger of dallying with Shari'ah compliant finance, which is that it leaves the door open for the gaudier aspects of Shari'ah, which includes stoning women in the streets.
 Jaffaascalon | February 22, 2010 9:09 AM | Reply
Ha-ha! I thought it was a joke. I mean ridiculous. Or am I not getting something here? I mean like wow. Honestly how foolish is it to have to decide on little things like that? After a few years and a changing of imams he might have to eat his fatwa.
 Jaffaascalon replied to comment from gravenimage | February 22, 2010 9:21 AM | Reply
I partly agree with the post regarding the Catholic concept -but one that focuses on ways and means to lighten the effect that's comes with debt owed. The huge difference is nowadays you do not see the Bulls proclaiming as religious truth that credit cards make God angry at you. The focus of the church is the welfare and social well being and all those related aspects of the economy. That is how I would like to see that economic paper analyzed. In contrast to how Islam would just like to highlight your mistake pinpoint what could be fatwad and end there. As we all know the economy does not run like that nor end there, and as we all have come to the conclusion that Islamic economies live in the far away past and only surviving because of oil or weapons technology markets. My point being that usury is frowned upon when compassion to the debtor is not present.


Bundle “CGC”


A Fatwa concerning the Cordoba Gold Card
Haitham Al-Haddad


Apr 25 |01:00
Last Updated on Sat, 03 Jul 2010 16:56
... I have been recently approached by the Cordoba Financial Group in a request to comment on the legality of the Cordoba Gold CashPlus prepaid MasterCard...
 
All praise and recognition is due to Allah, the Lord of the worlds; and His peace and blessings be upon our Prophet, Muhammad, his family, and all his Companions.
I have been recently approached by the Cordoba Financial Group in a request to comment on the (Islamic) legality of the Cordoba Gold CashPlus prepaid MasterCard. Proceeding a detailed investigation of the product as well as thorough discussions with Cordoba’s senior executives, I have concluded that the abovementioned scheme complies with the requirements of Shari‘ah and is therefore permissible for the use of purchasing goods and withdrawing cash. However, it must be noted that the card should not to be used for buying gold, silver, stocks, foreign currencies or withdrawing money in other currencies as such transactions are known as sarf, and in accordance with Islamic law the exchange of two counter-commodities must be physical and prompt according to a hadith (prophetic statement) narrated by Abu Sa’eed al-Khudri, that the Messenger of Allah (may peace and blessings be upon him) said, "Do not trade gold for gold unless it be like for like (in quantity), let not the quantity of one exceed the other. Do not trade silver for silver unless it be like for like (in quantity), let not the quantity of one exceed the other. Do not trade that which is absent for that which is present".
The card operates as follows:
The user first purchases the card from the Cordoba Financial Group for a small price which contributes to the administration costs of processing the user’s application, the opening of a bank account with The American Express Bank, the costs of producing the card, and other administrative functions.
Once the card is purchased, the cardholder must top-up the card at a top-up point. The value of the top-up is deposited into the cardholder’s bank account at the AFL Bank within 24 hours. AFL bank is a specific vehicle set up for this purpose and is regulated by the Bank of England. This bank account is an escrow account and AFL Bank therefore treats it as a trust - it is shown on the bank’s balance sheet as an amount due to a specific individual whereas other forms of current accounts are treated as loans made to the bank. As a trust, AFL Bank is contractually obliged to segregate the underlying funds, and so, may not use them to finance other projects or give loans to other clients.
When the card is used to make a purchase, the amount of the purchase along with a transaction fee will immediately be deducted from the escrow account (a similar process operates when cash is withdrawn). As a trust, the cardholder cannot use the card for purchases or withdrawals that exceed the balance held within his/her account and any request to make a transaction the value of which is beyond that balance will be declined at the point of purchase. Thus, no credit-based transaction can take place through the use of this card.
As a result of the above process, the balance of the trust account increases when topped-up and decreases when a purchase or money withdrawal occurs, the entire process taking the normal time frame required for processing transactions through the banking system.
The initial fees paid to obtain the card as well as the transaction fees do not render the product impermissible as the Shari‘ah allows a trustee to be paid to administer a trust and I hold both MasterCard and Cordoba Financial Group to be acting as trustees in this context. The trust concept is widely accepted by Muslim scholars who have allowed for a trustee to be compensated for his effort.
An important issue to take note of is the requirement of funds in each account to be segregated as a trust for the sole access, and benefit, of the account holder. Unfortunately, the use of electronic money and pooled funds is all pervasive in the current financial system. Therefore, cardholders’ funds cannot be physically isolated in the way that we would prefer. Given this context, the minimum we require is that the escrow balances not be included in the total assets of the bank which means that the bank can neither claim the right to use such funds nor can carry out activities based on such a claim.
As it is based upon the trust concept, the Cordoba Gold CashPlus prepaid MasterCard complies with the requirements of Shari‘ah. However, any alteration to the above described contractual processes as well as any contractual agreements or arrangements that contradict the essence of trust may violate the (Islamic) legal permissibility of the card. Such violations include altering the account from a trust to a loan basis and/or use of the trust money for financing other products or activities. It is of paramount importance to note that this fatwa (legal ruling) is not based on my personal preference or leaning towards a particular opinion among the various legal opinions, but is founded on precepts generally accepted by scholars from all school of thoughts which are based on the Qur’an and Sunnah (prophetic tradition).
In conclusion, I pray that Allah grant the individuals in charge of this project success, as well as to aid them to further His cause. Authentic Islamic finance has a key role to play in maintaining justice for the whole of humanity in this disturbed world.
I would like to take this opportunity to remind all Muslims that using credit cards for purchasing items is completely impermissible as they are usury-based loans offered to the client. Few can claim to be adequately certain of re-paying the loan before the given deadline so as not to incur any (interest-based) increase on the loan. A normal credit card contract contains a form of riba which the credit-card provider stipulates to charge from the very outset rendering the contract impermissible. The Messenger of Allah (may peace and blessings be upon him) said: “Muslims are bound by their conditions, except for conditions which forbid something that is permitted or permit something that is forbidden.” Undoubtedly, a large proportion of people who are now heavily indebted to credit card companies were initially confident that they could pay off their debts on time thereby avoiding compounded interest charges.
The same ruling has been given by the International Islamic Fiqh Council, belonging to the Organization of the Islamic Conference (OIC) in its statement: number 108 (2/12).
With Allah lies all success and may He convey prayers and salutations upon our Prophet (may peace and blessings be upon him), his family, and his companions.
Shaikh Haitham Al-Haddad
Muslim Research and Development Foundation.
www.mrdf.co.uk
11th Rabi’ Al Thaani 1430/ 4th April 2009.
 



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