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2013 October
25
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Even Islamic banks are ‘Haram’, says petition in Shariat Court

ISLAMABAD: The complete but gradual elimination of the present banking system of the country, including the State Bank of Pakistan and even the Islamic banks, has been sought for being “Haram” in the Riba case, presently being heard by the Federal Shariat Court (FSC) after a lapse of over ten years, writes Ansar Abbasi.

A party in this all-important Riba case questioned on Monday the validity of the whole banking system of the country including the State Bank of Pakistan and even the Islamic banks in the light of Islamic teachings and has called for the elimination of the present financial system.

Former MPA from Punjab Dr Humaira Shahid, who has become party in the case, has sought the replacement of the present system by the Islamic financial system called ‘Muamalaat.’ To the horror of millions of Pakistanis who have deposited their savings in the Islamic Banks over the years to avoid Riba, the petitioner in her written document presented before the FSC has termed even the Islamic banks as “haram”.

Riba-Petition2
“We contend that the idea of Islamisation of capitalist institutions and instruments is a deception which instead of eradicating Riba has made ‘Riba halal’,” the document said, adding that Islamic banks are deceptive, and furthermore the Islamisation of paper money is deceptive.

It added, “We contend that Islamic banks are haram. The contract of Murabaha has become one of the major instruments of Islamic banks to disguise Riba under a façade of Islamic contracting. Murahaba is a sale contract and not a financial contract. The Mark-up in Murabaha is only a way of stating the price of goods sold and cannot be conditional to a prior agreement as in the forbidden case of ‘two sales in one’.”

Dr Humaira prayed that any attempt to eradicate Riba must focus on what is the alternative to Riba. “This is because we cannot eliminate what is forbidden without providing an alternative from within what is permitted.”

About the alternative system, she said that the model of what is halal exists and it can be implemented within the frame of the Islamic law and the Constitution of Pakistan. The model called Muamalaat, the document said, is socio economic model of all Islamic societies from the beginning of Islam until the fall of the Khilafat.

“This model is surprisingly more or less common to all pre-capitalist societies (including some non-Islamic societies) and it was perfect during the time in the city of Madina al-Munawara,” she added.

Disclosing that the system has already been introduced in some Muslim countries including Malaysia and Indonesia, Dr Humaira maintained, “Muamalaat is the right alternative to the question of how to eradicate Riba.” She added that the present banking and financial institutions have already told the FCS that these institutions will not be able to operate without Riba.

About the system of Muamalaat, it is said that it not only involves contractual matters but also institutions and instruments that support and promulgate what is halal such as Gold Dinar, Silver Dirham, Wadi’ahs (safe keeping institutions), Suqs (open markets), Caravans (open trading institutions), Guilds (Open production institutions), Waqf (welfare institutions), Bai Salam (agriculture trading system), Bait ul Maal etc.

The document said that the introduction of the Gold Dinar and Silver Dirham, known as Shariah currency, is fundamental to introducing Muamalaat and eradicate Riba.Dr Humaira Shahid disclosed that in 2008 the Government of Kelantan in Malaysia decided to introduce the Dinar and Dirham as a means of payment in the whole State and offer all State workers to pay up to 25% of their salaries using Dinar and Dirhams.