ANSWERS TO SOME FREQUENTLY Dissertation Example | Topics and Well Written Essays - 1000 words

ANSWERS TO SOME FREQUENTLY - Dissertation Example 2. WHAT IS THE SCOPE OF TRANSACTIONS TO WHICH THE BAN ON RIBA IS APPLICABLE? DOES THE TERM APPLY ONLY TO THE INTEREST CHARGED ON CONSUMPTION LOANS OR DOES IT ALSO COVER PRODUCTIVE LOANS ADVANCED BY BANKING AND FINANCIAL INSTITUTIONS? The Shariah obviously expresses that riba al-nasi'ah, â€Å"the fixing ahead of time a positive profit for an advance as a compensation for waiting† is precluded. Subsequently it could be comprehended as a restriction on enthusiasm as usually utilized today. Islamic law specialists, the fuqaha, state in no muddled terms that all signs of riba are prohibited. So it doesn't make a difference if the setting is utilization or business and furthermore whether the credit in gave or profited. It is additionally superfluous whether the organization being referred to is a business bank, government office, business venture or a person. 3. DOES THE PROHIBITION OF RIBA APPLY EQUALLY TO THE LOANS OBTAINED FROM OR EXTENDED TO MUSLIMS AS WELL AS NON-MUSLIMS? The Islamic Fiqh Academy (IFA), which is the main expert on budgetary exchanges, makes reference to that there is no mercy in the use of Shariah laws regardless of whether one gathering of a money related exchange is non-Muslim. ... IS SUCH A SCHEME ACCEPTABLE FROM AN ISLAMIC POINT OF VIEW? In economies with high paces of expansion, limitations forced by Shariah laws can subvert estimation of speculations. To make up for such a misfortune, a strategy for indexation is generally utilized. There is no accord yet among the fuqaha, concerning the similarity of indexation rehearses with Islamic sacred writings. So far the Fiqh Academy has allowed indexation in cases relating to â€Å"wages and contracts satisfied over a time of time† and has prohibited in cases relating to fiscal obligations. So also, â€Å"for obligations in a particular money, due in portions, the gatherings may consent to settle the portions due in an alternate cash at the overall pace of trade on the date of settlement†. 5. WHAT ARE THE MAJOR MODES OF FINANCING USED BY ISLAMIC BANKS AND FINANCIAL INSTITUTIONS? Islamic financial framework has developed a couple of bright methods of financing so as to consent to Shariah standards. The primary mode depends on sharing of the two benefits and misfortunes brought about by speculations, individually the mudarahab (inactive association) and musharakah (dynamic organization). The subsequent mode works based on layaway offered durig the acquisition of products and enterprises and uses such money related ideas as murabahah (deal at a benefit markup), ijarah (renting), salam and istisna (contracts). These modes are remarkable to Islamic back and have been affirmed by fiqh authorities. Aside from being reliable with Islamic statutes, these modes boost direct speculations, in this manner adding to financial development of the bank/foundation/nation. However, upgrades should be done so as to incorporate Islamic monetary framework into worldwide