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The Judgement on Riba

The Judgment on Riba

It is generally assumed that from the point of view of material wealth, things have never been better than today. That, despite just crossing over the most murderous century in human history which saw the first-time use of weapons of mass destruction on civilian population, the colossal annihilation of the eco-system and fauna, and the largest numbers of starvation victims known in history. All past and present miseries are forgotten before the general assumption that the average person today enjoys a standard of living not equalled in any other time. Yet, it has not been the same for all people of the world. While a material improvement has been achieved for a relatively small portion of mankind, the bottom half still lives on an income inferior to the poverty line of 2 USD a day, and collectively inferior to the income of the 387 largest individual earners. This disequilibrium in wealth goes hand in hand with an equal in political and military imbalance that has turned one nation in particular into the police ruler of the world.

During this period of massive shift of wealth to a small corner of the world, Muslims have lost an immense part of their past economic and political status. The political unity represented by the Khalifate that granted Muslims a voice in world affairs was devastated, and instead a trail of tiny nations emerged under the auspices and new legal frame of the UN. Large parts of our population belong to the bottom half of world earners and our combined GDP does not reach 1/10 of the US. Politically divided, and losers in the economic sharing, Muslims only face the prospect of being underdogs in the present economic system. Under this regime a continuous erosion of our social and cultural life is inevitable which in turn results in the increased anger and frustration of our youth.

This present system of economic disequilibrium is self-preserved by diverting attention away from economic matters into political matters. The economic system which causes the imbalance is taken for granted and individual political tyrants become the focus of political struggle. Under these circumstances the economic system remains unquestionable and therefore its continuation is granted.

At its core this system of disequilibrium which we call capitalism is based on usury. Usury is in itself disequilibrium. Mechanised usury through the banking system has turned a criminal contract into a means of economic domination. For as long as we remain slaves of riba our Muslim nation will remain enslaved.

A society which misunderstands the dynamics of the world will find it difficult to focus in establishing its goals. These are swept away in the emotion of the moment. And so, acts which are intended ‘to do good’ are lost by the lack of direction. In these circumstances, no amount of effort will prove fruitful.

Understanding Riba is essential to understanding capitalism. The Islamic understanding of riba opens the path to restore our own mu’amalat and thus create the tools that can overcome the present system. Riba is not only negative. It opens the path to the positive construction of the halal. Only when we remain confused between the halal and the haram can our enemies find it easy to destroy our efforts. In this document we intend to cast some light on this matter of Riba.

Allah says in the Qur’an:

“Allah has permitted trade and forbidden usury”

Riba represents the opposite of trading, it is the corruption of trading. There cannot be trading with riba, nor riba with trading. Yet, riba has become the core of today’s face of kufr: capitalism. For this reason, riba is the most important political issue facing our Muslim nation today. Riba affects every aspect of our life and it is traceable to two main institutions: the Bank and the State. Despite its importance this understanding remains superficial for most Muslims. Most people simply think that riba is merely interest. The reality of riba is a much more complex affair. This misunderstanding is not just a miscalculation; it is the product of a mis-education and indoctrination which has resulted from two phenomena: one, the destruction of the political power of the Khalifate, and two, the process of the so-called “Islamic reform” which followed. This misunderstanding opened the gates to the islamisation of the most important institution of capitalism: the bank. What the open market-place is to trading, the bank is to riba. A ‘reformed riba’ would allow the new promoters of the Islamic bank to justify their actions. It is for this reason essential to return to a correct understanding of this key term in the fiqh, that can allow us to discern what is haram and what is halal. This is crucial to overcome capitalism, and its illusion of power.

This brief introduction will try to outline as plainly as possible the issue of Riba in Islamic Law, and to undo the misunderstanding created by the ‘reformers’ and modernist scholars.

Riba literally means ‘excess’ in Arabic. Qadi Abu Bakr ibn al-Arabi, in his “Ahkamul Qur’an” defines it as: any excess between the value of the goods given and their countervalue (the value of the goods received). This excess refers to two matters:

1] an extra benefit arising from unjustified increase in the weight or measure, and
2] an extra benefit arising from unjustified delay.

These two aspects have led our scholars to define two types of riba. Ibn Rushd said:
“The jurists unanimously agreed about riba in bay’ (trade) that it is of two kinds: delayed (nasi’ah) and stipulated excess (tafadul).”

That is to say, there are two types of riba:

1] Riba al-Fadl (excess of surplus or disparity)
2] Riba al-Nasiah (excess of delay or deferment)

Riba al-fadl refers to quantities. Riba al-nasiah refers to time delay.

Riba al-fadl is very easy to understand. In a loan, riba al-fadl is the interest that is overcharged. But in general it represents when one party demands an additional increase to the counter-value. One party gives something worth 100 in exchange for something worth 110. This is also the forbidden case when two sales transactions are linked by a single contract (known as ‘two transactions in one’), in which one party is obliged to sell something at one price and to resell it after a time to the original seller for a decreased value. As a matter of fact, this is only a subterfuge to disguise the loan with interest under the pretence of a sale. Nobody needs these subterfuges today because you can get the loan directly in the bank. But the Islamic banks have resorted to this old trick to deceive their customers under the misinterpreted name of murabaha.

Understanding Riba al-nasiah is more subtle. It is an excess in time (a delay) artificially added to the transaction. It is an unjustified delay. This refers to the possession (‘ayn) and its non-possession (dayn) of the medium of payment (gold, silver and food-stuff -which was used as money). ‘Ayn is tangible merchandise, often referred to as cash. Dayn is a promise of payment or a debt or anything whose delivery or payment is delayed. To exchange (safr) dayn for ‘ayn of the same genus is Riba al-nasiah. To exchange dayn for dayn is also forbidden. In an exchange it is only allowed to exchange ‘ayn for ‘ayn.

This is supported by many hadith on the issue. Imam Malik related:

‘Yahya related to me from Malik that he had heard that al-Qasim ibn Muhammad said, “‘Umar ibn al-Khattab said, ‘A dinar for a dinar, and a dirham for a dirham, and a sa’ for a sa’. Something to be collected later is not to be sold for something at hand.'”

Yahya related to me from Malik that Abu’z-Zinad heard Sa’id al Musayyab say “There is usury only in gold or silver or what is weighed and measured of what is eaten and drunk.”

The hanafi scholar Abu Bakr al-Kasani (d. 587H) wrote:

“As for riba al-nasa’ it is the difference (excess) between the termination of delay and the period of delay and the difference (excess) between the possession (‘ayn) and non-possession in things measured and weighed with different genera as well as in things measured and weighed with the uniformity of genera. This is according to al-Shafi’i (may Allah bless him), it is the difference between the termination of the period and the delay in foodstuff and precious metals (with currency-value) specifically.”’

Riba al-nasiah refers particularly to the use of dayn in the exchange (sarf) of the same genera. But the prohibition is extended to sales in general when the dayn representing money overpasses its private nature and replaces the ‘ayn as a medium of payment.

Imam Malik, may Allah be merciful to him, illustrates this point in his ‘Al-Muwatta’:

‘Yahya related to me from Malik that he had heard that receipts (sukukun) were given to people in the time of Marwan ibn al-Hakam for the produce of the market of al-Jar. People bought and sold the receipts among themselves before they took delivery of the goods. Zayd ibn Thabit, one of the Companions of the Messenger of Allah, may Allah bless him and grant him peace, went to Marwan ibn Hakam and said, “Marwan! Do you make usury halal?” He said, “I seek refuge with Allah! What is that?” He said, “These receipts which people buy and sell before they take delivery of the goods.” Marwan therefore sent guards to follow them and take them from people’s hands and return them to their owners.’

Zayd ibn Thabit specifically calls riba those receipts (dayn) ‘which people buy and sell before taking delivery of the goods’. It is allowed to use the gold and silver or food to make the payment, but you cannot USE the promise of payment. In it there is an excess that is not allowed. If you have dayn, you have to take possession of the ‘ayn it represents and then you can transact. You cannot used the dayn as money.

In general the rule is that you should not sell something which is there, for something which is not. This practice is called Rama’ and it is Riba. Malik continues:

‘Yahya related to me from Malik from ‘Abdullah ibn Dinar from ‘Abdullah ibn ‘Umar that ‘Umar ibn al-Khattab said: “Do not sell gold for gold except like for like. Do not increase part of it over another part. Do not sell silver for silver except for like, and do not increase part of it over another part. Do not sell some of it which is there for some of it which is not. If someone asks you to wait for payment until he has been to his house, do not leave him. I fear rama’ for you. Rama is usury.”’

Rama’ is today the common practice in all our markets. Dayn currency (paper money, receipts) has replaced the use of ‘ayn currency (Dinar, Dirham). This practice is what Umar ibn al-Khattab meant when he said ‘I fear rama’ for you.’

Selling with delay is not restricted to metals, it also includes food. Malik said, ‘The Messenger of Allah, may Allah bless him and grant him peace, forbade selling food before getting delivery of it.’

Therefore, what is prohibited in Riba al-nasiah, is the addition of an artificial delay that does not belong to the nature of the transaction. What does ‘artificial’ and ‘the nature of the transaction’ mean? It means that every transaction has its own natural conditions of timing and price.

A loan involves delay but not quantity excess. One person gives an amount of money, after a period of time (excess) the person returns the money without increase. The excess in time is justified and is halal, but adding an increase in the quantity to be repaid is unjustified and is haram. This is Riba al-fadl.

An exchange involves no delay and no quantity excess. One person gives an amount of money and without delay the equivalent is given. Delays are not justified in an exchange. If you want to delay the payment, you have to make a loan, you cannot obtain a loan disguised as a ‘delay exchange’. Delayed exchange is Riba al-nasiah.

A rental involves delay and excess and it is halal. When you rent a house, you take possession of the house for a time (excess) and you return it plus the payment of a rent (excess). These excesses both in time and quantity are justified and they are halal.
But you can only rent merchandise that can be hired. You can hire a car, a house or a horse. But you cannot hire money or food stuff (fungible goods). To pretend to hire money is to corrupt the nature of the transaction and it becomes Riba.

Thus every transaction has its conditions relating to its nature. You cannot take the conditions of one type of transaction and try to apply them to the other without corrupting the transaction. To add unjustified conditions or excess to a transaction is Riba.

Since dayn is in itself a delay, the use of dayn is restricted to private transactions and it is prohibited as a general means of payment (money). While dayn per se is halal, it is not halal to use is as money. Dayn is a private contract between two individuals and must remain private. The transfer of dayn from one person to another can be done Islamically, but only by the elimination of the first dayn and the creation of a new one. The dayn cannot circulate independently of what it represents. The owner must take possession of the goods and liquidate the dayn. Dayn cannot be used in an exchange and it cannot be used as a means of payment. It is specifically forbidden to use dayn to pay zakat.

The misunderstanding of Riba by Islamic reformers

Islamic reformers and modernist scholars have made a deliberate effort to equate riba with riba al-fadl and ignore riba al-nasiah. Saying ‘riba is interest’ is part of this misunderstanding.

Their misunderstanding starts with the early reformers, especially Rashid Reda. Rashid Reda presented a new classification of Riba. Reda made a distinction in the legal treatment of what he called the ‘riba of the Qur’an’ and the ‘riba of the Sunnah’. Reda maintained that the primary form of Riba was the one prohibited by the Qur’an, and this prohibition is to be maintained at all times. On the other hand, the texts of the Sunnah prohibit a lighter or secondary type of riba – according to him – which is generally prohibited but may be permitted in case of necessity (darurah).

He maintained that the riba prohibited in the Qur’an was the riba known as ‘riba al-jahiliyyah’ (when a person did not pay his due after the stipulated time, the seller would increase the price) which he wrongly equated with riba al-nasiah. And he wrongly said that riba al-nasiah (completely misunderstanding its meaning) was only haram when it involved compound interest, and therefore single interest was excluded from the prohibition. He therefore concluded that simple interest charged or paid by banks was not prohibited by the provisions of the Qur’an at all, nor by the Sunnah.

He also maintained that the remaining prohibition from the Sunnah referred to the specific event of the exchange. Thus for example if two persons were exchanging gold with each other, the amount of gold must be equal in weight on both sides and the two quantities must change hands on the spot, at once. He argued that unlike the riba al-jahiliyyah, this type was not known to the Arabs, since it was difficult to conceive of why two persons would exchange equal quantities of the same commodity at once. Riba al-fadl was seen as part of the abandoned practice of barter when people would exchange gold for gold (and similar), yet it is not practised any more.

The famous hadith of ‘hand to hand’ and ‘equal for equal’, referring to riba, has not been understood by the modernist scholars. They could not understand the relevance of the argument and the form in which it is described. Gold for gold, equal for equal and hand to hand, is a description of the balance of the transactions. One aspect refers to the equivalence in the quantities which refers by default to riba al-fadl; the other to the immediateness of the transaction which refers by default to riba al-nasiah. It discards the possibility of exchanging ‘gold which is not present’ (dayn) for ‘gold which is present’ – ‘ayn. It is very relevant because this is how Muslims got cheated away from their gold, by exchanging it for false promises of gold (the original form of paper money). It follows that in order to make paper money halal, the modernist scholars had to ignore the relevance of this hadith and this formulation.

The hadith refers in the positive to the specific event of exchange of dinars and dirhams of different denomination; in the negative to the impossibility to use promises of payment in the exchange. Both cases are relevant and important to us.

In conclusion, Reda’s views were that:
A] Riba al-nasiah was only riba al-jahiliyya. And only compound interest was forbidden by it.
B] Riba al-fadl was relative to the exchange. It was secondary in nature and it could be accepted in case of necessity (darurah).

The followers of Reda basically adopted the same classification but differed with him on the issue of the compound interest. They agreed that single interest was also haram, but they agreed that darurah can be applied. And they saw riba al-fadl as being secondary, related to what they saw as barter.

The truth is that both riba al-nasiah and riba al-fadl are prohibited by the Qur’an. In fact the Riba of the Qur’an and the riba of the Sunna are exactly the same. The Sunna simply acts as a living commentary of the Qur’an.

The riba known as riba al-jahiliyyah contains both riba al-nasiah and riba al-fadl. In this transaction, the payment is delayed (nasiah) in exchange for an increase (fadl).
But riba al-nasiah involves more than just the riba al-jahiliyyah.

Implications of the modernist position

By ignoring the true nature of riba al-nasiah, modernist scholars have avoided confronting the issue of paper money. Let us look at this issue which the modernists have missed. Paper money can be considered as ‘ayn or as dayn.

A] If we accept the fact that paper money is dayn, meaning that it is an obligation to pay a certain amount of ‘ayn, then paper money cannot be used in exchange and it is forbidden in two practices:

1. Dayn cannot be exchange for dayn. Paper money for paper money is a debt for a debt, which is prohibited. Malik said: ‘[The disapproved transaction of] delay for delay is to sell a debt against another man for a debt against another man.’

2. Dayn based on gold and silver cannot be exchange against gold or silver, because that is against the fundamental command: ‘Yahya related to me from Malik from Nafi’ from Abu Sa’id al-Khudri that the Messenger of Allah, may Allah bless him and grant him peace, said, “Do not sell gold for gold except like for like and do not increase one part over another. Do not sell silver for silver, except like for like and do not increase one part over another part. Do not sell some of it which is not there for some of it which is.’

B] If we accept that paper money is ‘ayn, then its value is the weight of the paper, not what is written on it. If the value of the paper is increased by compulsion, the value is corrupted and the transaction is void according to Islamic Law. Paper money is used by the State as an (illegal) tax and it cannot be presented as an Islamic means of payment.

Understanding riba al-nasiah is fundamental to being able to understand our position regarding paper money. The reason why the modernist ulema took their twisted position on riba was clearly to validate the unthinkable: banking. This justification later turned into Islamic banking. The principle of darurah combined with the elimination of riba al-nasiah has allowed them to justify the use of paper money and in turn to justify fractional reserve banking which is the basis of the modern banking system.

A proper understanding of riba al-nasiah reveals paper money to be a form of riba in itself, because it is intended to be used in a way that is not permitted.

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Gold and Silver – The Colour Of Shari’a-Compliant Money

 

In the Numismatical department of the British Museum there is preserved a curious and interesting gold coin, over twelve hundred and thirty years old, on which is inscribed in unmistakable Arabic characters the declaration that ‘There is no Deity but Allah, The One, Without Equal, and Muhammad is the Apostle of Allah,’ and the further declaration, engraved around the margin of the coin, ‘Muhammad is the Apostle of Allah, Who sent him (Muhammad) with the doctrine and the true faith to prevail over every other religion.’

This coin was engraved, struck and issued by Offa, King of Mercia, or ‘Middle England’ (an ancient Anglo-Saxon kingdom, which extended on both sides of the River Trent from the North Sea to Wales), from 757 to 796.

 

‘Islamic Finance’ and ‘Shari‘a Compliance’

At the Islamic Finance and Trade Conference held in London on the 13th and 14th June 2006, what has come to be known as ‘Islamic Finance’ came of age. Important figures from the financial world gathered to mark its progress and emphasise its potential. In his keynote speech the then Chancellor Gordon Brown spoke of how he wanted “to make Britain the gateway to Islamic finance and trade” and of his ambition “to make Britain the global centre for Islamic finance”. He also spoke proudly of how recent regulatory reforms in England have supported “the development of Shari’a compliant finance” – by bringing Shari‘a compliant products comfortably and inextricably within the Bank of England’s financial fold.

 

Although Mr. Brown quoted some hadith of the Prophet Muhammad, may Allah bless him and grant him peace, it is significant that he did not quote any of those which deal specifically with financial transactions, perhaps because he also referred to his master the Governor of the Bank of England’s speech made the previous evening in Edinburgh in which Mervyn King referred to the twin features of the Bank’s present framework for monetary policy – “namely inflation targeting and independence of the Bank of England”. Having observed that “there are some signs of inflationary pressures in the main industrial countries” and that “the economic outlook is far from certain,” the Governor concluded that the Monetary Policy Committee, which meets monthly to decide on interest rates, would, “month by month, be debating the prospects for the economy in order to decide in which direction, if any, interest rates need to move.”

 

The Chancellor did not have to spell it out, for clearly any accommodation of ‘Islamic Finance’ by a financial system which is based on manipulating interest rates, the prime cause of inflation, could not possibly involve the abolition of usury – which was illegal in England until Henry VIII changed the law. Clearly the quid pro quo for the Bank of England’s recognition and support of ‘Islamic Finance’ is that Muslims are expected to accept regulation by a banking entity immersed in usury – even though, from a Shari‘a perspective, usury is a serious crime, since it always involves exploiting human need in order to gain something for nothing.

 

This between the lines message was also inherent in the speech given by Callum McCarthy, the Chairman of the Financial Services Authority whose four statutory objectives are firstly, market confidence: maintaining confidence in the financial system; secondly, public awareness: promoting public understanding of the financial system; thirdly, consumer protection: securing the appropriate degree of protection for consumers; and lastly, the reduction of financial crime: reducing the extent to which it is possible for a business to be used for a purpose connected with financial crime.

 

Mr McCarthy outlined the FSA’s approach towards the regulation of Islamic finance by emphasising the need to provide “a framework which offers those who use Islamic finance, whether from wholly Sharia compliant Islamic banks or by way of Sharia compliant products offered by non Islamic banks, the same degree of protection which is offered to those who use non Islamic finance”. He emphasised the need to promote “financial inclusion” – in other words the inclusion of ‘Islamic Finance’ within the parameters of the main banking system – and with this goal in mind he observed that, “We at the FSA are determined to continue to help the development of Islamic finance in the UK.”

 

Significantly, Mr McCarthy referred to “the special position of the Sharia Supervisory Board within an Islamic Bank”, for without the sanction of a Sharia Supervisory Board, no financial product or banking entity can be deemed ‘Shari‘a compliant’. It is therefore very important to the interests of the banking community that Sharia Supervisory Boards make favourable decisions.

 

The Big Question

The eminent members of the various Shari‘a supervisory boards have worked extremely hard to ensure that their Islamic financial institutions and Islamic financial products are ‘Shari‘a compliant’ – thereby ensuring a healthy number of local, national and international portals through which Muslims’ wealth can be channelled in to support the main banking system. Just as some scientists have agreed not to ask what existed before the Big Bang, however, the Shari‘a boards appear to have agreed not to ask themselves whether paper money – and by extension, digital electronic money – is Shari‘a compliant. This is in spite of the fact that if a transaction is to be truly Shari‘a compliant, then the means of exchange utilised in the transaction must be Shari‘a compliant. So, let us ask the Big Question on their behalf, “Is paper money Shari‘a compliant?”

 

Paper Money

What is paper money? Today paper money is an unredeemable I.O U. For example, I have an English £5 note which records a ‘promise to pay the bearer on demand the sum of FIVE Pounds’ made by Merlyn Lowther, ‘the Chief Cashier’. This promise refers to the time when people (they weren’t referred to as consumers in those days) used to deposit their gold sovereigns and silver florins with the bankers who would give them an I.O.U. in exchange which promised to repay the sum of gold or silver when asked. People soon realised that these I.O.U.s could be used as a means of exchange in any number of financial transactions before being turned back into gold or silver when needed. Then the bankers began printing I.O.U.s even though they were not backed by gold or silver and using them as money – although they did make sure that they still had enough gold and silver to honour any I.O.U. if anyone did ask for it to be redeemed. At this point, this paper money was a redeemable I.O.U. By this means the bankers were able to loan printed money on interest which in turn resulted in more money being created out of nothing – which meant that more I.O.U.s had to be printed.

 

When asked if he would become king of America, a banker replied, “Give me control of the issuing of money and credit and I care not who sits in the house of politics.”

 

In the end, there were so many I.O.U.s – there was so much paper money – that it became no longer possible to honour them. So the bankers changed the rules and informed every-one that they could still use the paper money as a means of exchange, but they could no longer exchange it for gold or silver. In the end gold and silver money was taken out of circulation altogether.

 

Everyone knows, myself included, that even if I manage to locate Merlyn Lowther himself, he is not going to keep his promise. He is not a magician. My £5 note is not backed by gold or silver. It is only a piece of paper with a fancy design and a number printed on it. It is only worth what people think it is worth. Is this piece of paper a Shari‘a compliant means of exchange? No it is most definitely not.

 

An I.O.U. is not a Shari‘a Compliant Means of Exchange

The authority for the prohibition of using an I.O.U. as a medium of exchange derives from the earliest days of Islam:

 

Yahya related to me from Malik that he had heard that receipts were given to people in the time of Marwan ibn al-Hakam for the produce of the market at al- Jar. People bought and sold the receipts among themselves before they took delivery of the goods. Zayd ibn Thabit and one of the Companions of the Mes-senger of Allah, may Allah bless him and grant him peace, went to Marwan ibn al- Hakam and said, “Marwan! Do you make usury halal?” He said, “ I seek refuge with Allah! What is that?” He said, “These receipts which people buy and sell before they take delivery of the goods.” Marwan therefore sent a guard to follow them and to take them from people’s hands and return them to their owners. (Al- Muwatta of Imam Malik : 31.19.44)

 

In other words, an I.O.U. cannot be used as a means of exchange, even if it can be redeemed for gold or silver – because it opens the door to usury. For example, A sells B some goods for 10 gold dinars. B does not have the money on him, so he writes A an I.O.U. and takes possession of the goods. A is not permitted to use that I.O.U. as a means for purchasing goods from C – because the transaction may become usurious. For example, C may only agree to sell goods which are worth 9 dinars for the I.O.U. – for which he will subsequently receive 10 dinars from A. Or perhaps C will only accept 9 dinars in payment for the goods and A can only raise them from D who pays him 9 dinars for the I.O.U. knowing that A will give him 10 dinars for it.

 

Since today’s paper money is an unredeemable I.O.U., it follows that dealing with today’s paper money is in fact usurious – and therefore any financial transaction or financial product which involves its use is unavoidably usurious and cannot therefore truly be described as being Shari‘a compliant, let alone “wholly Shari‘a compliant” to use Mr McCarthy’s phrase.

 

Using digital electronic money is a substitute for using paper money and therefore the same analysis applies. Since virtually all money deposited with banks is used by the banks to provide loans on interest and to earn interest for the bank while not being used by the bank account holder, this means that even if an individual bank account holder does not accept interest on any credit balance, the bank will still be using the money in that credit balance to create money out of nothing by way of interest, either by lending it or by depositing it in an interest bearing account, whether it is overnight or for a longer period. Even if a bank assures its Muslim customers that their deposits will not be utilised to create money out of nothing by placing them in an interest-bearing account, this does not alter the fact that the money itself remains an unredeemable I.O.U. and is therefore itself usurious and accordingly not Shari’a compliant. If an I.O.U. is not a Shari‘a compliant means of exchange, what is?

 

Gold and Silver

Islamic jurisprudence clarifies the difference between gold and silver on one hand and paper money on the other by the legal terminology which is used to indicate their inherent characteristics : Gold and silver are categorised as ‘ayn (tangible merchandise with intrinsic value) – whereas paper money is categorised as dayn (a promise to pay, a debt). An ‘ayn can never be mistaken for a dayn – and vice versa. The Shari‘a permits an ‘ayn to be exchanged for an ‘ayn, but it is not permitted to exchange an ‘ayn for a dayn, nor is it permitted to exchange a dayn for a dayn.

 

Since the time of the Prophet Muhammad, may Allah bless him and his family and companions and grant them peace, the traditional currency of the Muslims has always been the gold dinar and the silver dirham. The Islamic dinar is a specific weight of 22 carat gold equivalent to 4.25 grams. The Islamic dirham is a specific weight of pure silver equivalent to 3.0 grams.

 

Umar Ibn al-Khattab, the second leader of the Muslim community after the death of the Prophet Muhammad, confirmed and established the known standard relationship between the two based on their weights: 7 gold dinars must be equivalent to 10 silver dirhams.

 

Traditionally, the respective weights of the two coins were determined with reference to the weight of a specific number of grains of barley:

 

“Know that there is consensus [ijma] since the beginning of Islam and the age of the Companions and the Followers that the dirham of the shari’a is that of which ten weigh seven mithqals [weight of the dinar] of gold. . . The weight of a mithqal of gold is seventy-two grains of barley, so that the dirham which is seven-tenths of it is fifty and two-fifths grains. All these measurements are firmly established by consensus.” (Al-Muqaddimah, Ibn Khaldun).

 

The gold dinar and the silver dirham have intrinsic value. They can only be devalued either by debasing them with other metals, or by clipping them so that they are under weight.

 

The gold dinar and the silver dirham can be used as a means of exchange – but they cannot be treated as a commodity in themselves, which means that they cannot be rented out (i.e. loaned on interest) and they cannot be replaced by or represented by an I.O.U. or a promise to pay.

 

Although Gordon Brown made no reference to it, an essential element of true Islamic finance is Zakat.

 

Zakat

As well as being one of the five pillars of Islam, an essential element of Islamic Finance is the Zakat tax, the annual obligatory tax on Muslims payable on surplus wealth at a rate of 2.5% – which after being collected is then distributed amongst the poor, thereby ensuring the re- distribution of unused wealth. Zakat can only be paid in gold and silver or in certain goods in kind or in certain livestock, but not with an IOU nor with fulus (small change represented by base metal coinage or paper tokens, with no inherent value) nor with digital electronic money.

 

When the great Maliki ‘alim, Shaykh Muhammad Alish (1802-1881), was asked:

 

“What is your judgement in respect to the paper with the stamp of the Sultan that circulates like dinars and dirhams? Is it obligatory to pay zakat as if it was a coin of gold or silver, or merchandise, or not?” he replied:

 

“Praise belongs to Allah and blessing and peace upon our Master Muhammad, the Messenger of Allah.

Zakat is not to be paid for it, because zakat is restricted to livestock, certain types of grains and fruits, gold and silver, the value of rotational merchandise [stock in trade] and the price of goods withheld. What has just been referred to does not belong to any of these categories.

 

You will find an explanation by making a comparison with the copper coin or fulus with the stamp of the Sultan which is in circulation and for which no zakat is paid since it does not belong to any of the categories just mentioned. It says in the Mudawwana : ‘Those who possess fulus for over a year for a value of 200 dirhams do not need to pay zakat unless it is used as a rotational merchandise [stock in trade]. Then, it should be treated as if it is merchandise.’

 

In the ‘At-Tiraz’, after mentioning that Abu Hanifa and Ash-Shafi’i obliged payment of zakat for the fulus, [it is stated that] since both affirm that the payment of zakat is from value, and considering that Shafi’i has two contradictory opinions about the subject, the opinion of this school is that there is no obligation to pay zakat for the fulus since there is no disagreement about the fact that what applies with respect to the fulus is not its weight or its quantity but only its given value. If the zakat was obligatory [on paper] by considering its substance as a merchandise, then the nisab would not be stipulated according to its given value but according to its substance and its quantity, as is the case with silver, gold, grain or fruits. Since its substance [paper] is irrelevant [in value] in respect to the zakat, then it should be treated the same as the [coins made of] copper, iron or other similar substances.

 

And Allah, ta’ala, is the Wisest. And may Allah bless and give peace to our Master Muhammad and his family.”

 

(Translated from the Al-Fath Al-‘Ali Al-Maliki, pp. 164-165).

 

In other words if Zakat were to be paid on paper money because it was being assessed as merchandise, or stock in trade, then the amount payable would be calculated with reference to its inherent value as paper in terms of its weight – and not with reference to its given value as indicated by the numbers, patterns and promises printed on it.

 

Since a small piece of paper is worth next to nothing, even if Zakat was payable on paper (which it is not), the Zakat payable on many pieces of paper would be negligible – and whether the numbers and symbols £5 or £10 or £50 or £100 or £1000 were printed on each piece of paper, this would be entirely irrelevant as regards measuring their worth as pieces of paper for the purposes of paying Zakat.

 

Since paper does not belong to any of the categories of goods on which Zakat is payable, and since paper money is in practice never treated as stock in trade, and since it is therefore treated as small change, it follows that it is in fact not Shari’a compliant to pay Zakat with paper money or with electronic digital money or with small change – or indeed to have a Zakat bank account, unless that account is an e-dinar or e-dirham account where every electronic dinar or electronic dirham is backed by a physical gold dinar or a physical silver dirham.

 

It follows that any future bona fide Islamic Finance and Trade Conference will need to consider the introduction of a universal Shari‘a compliant means of exchange in which Zakat can also be paid – in other words, in compliance with the Shari‘a of Allah and in accordance with the Sunnah of our master Muhammad, may Allah bless him and grant him peace, not Mervyn, the introduction of the traditional currency of the Muslims, the gold dinar and the silver dirham.

 

The Role of Islamic Banks and Shari‘a Boards

in establishing the Gold Dinar and Silver Dirham

Up to now most Shari‘a Boards have either failed to consider or have studiously ignored or skirted round this fundamental issue. This is either because their members have become so accustomed to using paper and digital electronic money that they do not see what it really is (that is, they cannot distinguish between an ‘ayn and a dayn), or it is because they argue that achieving Shari‘a compliance is an evolutionary process which will take time and therefore it is not feasible to deal with this issue at this stage. This is a false argument and as convincing as the argument which asserts that eventually a pig can evolve into a camel.

 

Sooner or later, the Shari‘a Boards will have to give this matter serious thought, for even if their current financial products are Shari’a compliant in every other aspect, in fact none of them will be Shari’a compliant until the means of exchange which they all utilise is itself Shari’a compliant. Furthermore, the Islamic banks now have the infrastructure by means of which Shari‘a compliant gold dinars and silver dirhams can be minted, distributed and utilised – and therefore any excuse based on the doctrine of darura (necessity) to avoid this obligation is simply no longer valid.

 

The principle of darura does not entitle Islamic banks to pretend that paper and digital electronic money are Shari‘a compliant by virtue of necessity indefinitely. The Shari‘a requires them to strive to move from what is haram (forbidden) to what is halal (permitted) – and since it will not be difficult to do this, this means that they cannot plausibly assert that there is no alternative to paper and plastic, however well qualified the members of their Shari‘a boards appear to be.

 

The Islamic banks and the governments of the traditionally Muslim countries now have the knowledge and the infrastructure and the resources to legally recognise the gold dinar and the silver dirham as their currencies, and to put the gold dinar and silver dirham back into circulation and to operate dinar and dirham accounts, including the use of internet technology, provided that each e-dinar and each e-dirham are backed by an equivalent number of gold dinars and silver dirhams.

 

No financial transaction and therefore no financial product can be truly Shari‘a compliant until these traditional Islamic means of exchange are in use again.

 

By doing this, they will also facilitate the proper collection and distribution of Zakat in gold and silver in compliance with the Shari‘a – which will in turn impede hoarding and ensure the equitable re-distribution of real wealth amongst the poor.

 

We look forward to the day when not only the Islamic Banks and Shari‘a Boards but also the Governor of the Bank of England, the Lord Chancellor and the Chairman of the Financial Service Authority have addressed these issues and brought the practices of their institutions within the parameters of the Shari‘a. Instead of re-defining ‘Shari‘a Compliance’ to suit the usurious banking system, there is an urgent need for the usurious banking system to become Shari‘a compliant if it is to survive and truly flourish. They will then be glad to quote the ayats of Qur’an and the Hadith of the Messenger of Allah, may Allah bless him and grant him peace, which never featured in their speeches at the Islamic Trade and Finance Conference 2006, especially the following ayats in which Allah (God) contrasts riba with bay‘ (trade) and with sadaqa (voluntary charitable giving) as follows:

 

Those who practise riba will not rise from the grave

except as someone driven mad by Shaytan’s touch.

That is because they say, ‘Trade is the same as riba.’

But Allah has permitted trade and He has forbidden riba.

Whoever is given a warning by his Lord and then desists,

can keep what he received in the past

and his affair is Allah’s concern.

But all who return to it will be the Companions of the Fire,

remaining in it timelessly, for ever.

Allah obliterates riba but makes sadaqa grow in value!

Allah does not love any persistently ungrateful wrongdoer.

Those who have iman and do right actions

and establish salat and pay zakat,

will have their reward with their Lord.

They will feel no fear and will know no sorrow.

You who have iman! have taqwa of Allah

and forgo any remaining riba

if you are muminun.

If you do not, know that it means war from Allah

and His Messenger.

But if you make tawba you may have your capital,

without wronging and without being wronged. (Qur’an : 2. 274-278)

 

The reported words of the Prophet Muhammad, may Allah bless him and grant him peace, and the recorded practices of the first Muslim community are equally explicit:

 

‘Abdullah ibn Mas‘ud related that the Messenger of Allah, may Allah bless him and grant him peace, cursed the one who accepted usury, the one who paid it, the witness to it and the one who recorded it. (Sunan of Imam Abu Dawud: 16.1249.3327)

 

Yahya related to me from Malik from Nafi‘ that he heard ‘Abdullah ibn ‘Umar say, “If some one lends something, let the only condition be that it is repaid.” (Al- Muwatta’ of Imam Malik: 31.44.94)

 

Malik related to me that he had heard that ‘Abdullah ibn Mas‘ud used to say, “If some one makes a loan, they should not stipulate better than it. Even if it is a handful of grass, it is usury.” (Al-Muwatta’ of Imam Malik: 31.44.95)

 

Abu Hurayrah related that the Messenger of Allah , may Allah bless him and grant him peace, said, “A time is certainly coming to mankind when only the receiver of usury will remain, and if he does not receive it, some of its vapour will reach him.” Ibn ‘Isa said, “Some of its dust will reach him.” (Sunan of Imam Abu Dawud: 16.1248.3325)

 

Today, most of the world’s population is choking on the dust of usury. The only cure is to restore the use of gold and silver as a means of exchange.

 

The Future

The impulse to make this transition from paper and plastic to gold and silver may well arise not so much out of a yearning to be pleasing to Allah by following His Shari‘a, and not so much out of a desire to be granted a place in the Garden in the next world as a reward for obedience to Allah, and not so much out of a wish to avoid a place in the Fire in the next world as a punishment for disobedience to Allah – but rather simply out of sheer necessity:

 

When it becomes unavoidably apparent that the frail bubble of modern economics must inevitably burst, given that paper money is only intrinsically worth the paper on which it is printed and given that most of the trillions of all the major currencies in the world today only exist as electronic data tenuously located on various hard disks around the world, then prudent investors are likely to exchange their worthless paper and digital electronic tokens for merchandise or property which possess intrinsic value.

 

From the sane perspective of the Shari‘a, it does not take a great deal of financial acumen or expertise to appreciate that most modern financial problems have arisen out of the institutionalisation of usury and that these have ballooned out of control in less than a lifetime – ever since the banking system abandoned the gold standard. Even economists who do not have access to the wisdom of the Shari‘a are beginning to realise that this departure from bi-metal backed currency has turned out to be no more than an experiment which has gone horribly wrong.

 

Historically, as long as the Muslims used gold dinars and silver dirhams, they thrived. Since it is an essential aspect of true Islamic finance that money may be used as a means of exchange, but must not be treated as a commodity (which means that it cannot be rented out – that is, loaned on interest), and since the Shari’a forbids any unjust increment in a commercial transaction (even by so much as a blade of grass), in this past age, usury was virtually non-existent and therefore there was zero inflation. For fourteen centuries, a silver dirham was enough to purchase a chicken and a gold dinar was enough to purchase a sheep. This is still the case today.

 

Since there was no usury and no inflation, other than the Zakat, there was virtually no taxation. As long as the Zakat tax was collected and distributed, there were no national debts. There was therefore no need to increase taxes every year in order to service the national debt, as is the case in most countries today, including the UK. Today elections are won or lost on a party’s taxation policy, not on their foreign policy however misguided.

 

Conclusion

If complicated mental gymnastics are avoided and the simplicity of the Shari‘a is acknowledged and appreciated, then it appears inevitable that the world of finance will one day return to a bi-metal based economy, simply because it is healthier and it has a proven track record of at least five millennia.

 

From a Shari‘a perspective, the return to the use of gold and silver currencies will not be an attempted escape back to the past, but rather it will be a recovery of sanity and true economic stability – and once established it will then and only then be possible to have truly Shari‘a compliant financial products, in substance as well as in name.

 

“Yahya related to me from Malik that Yahya ibn Sa‘id heard Sa‘id ibn al-Musayyab say, ‘Keeping gold and silver out of circulation is part of working corruption in the land.’” (Al-Muwatta of Imam Malik : 31.16.37)

 

To end on a positive note (and definitely not an I.O.U.) our prayer for the various Islamic banks and Shari‘a advisory boards and the Governor of the Bank of England, the Chancellor and the Chairman of the Financial Services Authority is that they do something really worthwhile during their brief time on earth – by bringing back gold and silver into circulation.

 

In the words of the HSBC advertisement, “Shari‘ah isn’t just a privilege, it’s an Amanah,” an amanah which the mountains refused – but which some people in every age have accepted, in compliance with the command of Allah and His Messenger, may Allah bless him and grant him peace.

 

Acknowledgements

Quotations from the Qur’an are from THE NOBLE QUR’AN – a New Rendering of its Meaning in English by Abdalhaqq and Aisha Bewley, (Bookwork, Norwich, 1999). The hadith which are quoted are from Al-Muwatta of Imam Malik translated by Aisha Bewley and Yaqub Johnson (Diwan Press, Norwich, 1982) and the Sunan of Imam Abu Dawud translated by Professor Ahmad Hasan (Sh. Muhammad Ashraf, Publishers, Lahore, 1984). Most of the definitions of Arabic and Islamic terminology are derived from A Glossary of Islamic Terms by Aisha Bewley (Ta-Ha Publishers Ltd, 1998). Much of the conceptual framework and some of the intellectual content of this article are the results of the research of Professor Umar Ibrahim Vadillo, Dean of Dallas College, Cape Town, South Africa and author of The Esoteric Deviation in Islam (Madinah Press, 2003).

 

 

Ahmad Thomson is a practising Barrister specialising mainly in Islamic, Charity, Employment and Discrimination Law (www.wynnechambers.co.uk). He is a co-founder and member of the Association of Muslim Lawyers (UK) and Muslim Lawyers (Europe). He embraced Islam in 1973.

STATEMENT FROM IMAM HAJJ ABDALHASIB CASTINEIRA
Shariah Counselor of World Islamic Mint and Former Imam of the Great Mosque of Granada
Kuala Lumpur, 16th of August 2010

Bismillah irrahman irrahim
Regarding the matter of the Gold Dinar and Silver Dirham and Legal Tender in Malaysia

The Gold Dinar and Silver Dirham known as Shariah currency or Shariah coins in the Fiqh are not legal tender. The Shariah currency has no relation to present fiat currencies on many accounts and should not be legally or practically be compared or treated as the same. The Gold Dinar and Silver Dirham relates to religious matters, most important of which is the matter of payment of Zakat, rather than constitutional matters. Its introduction can only occurred on voluntary basis since freedom is a command from Allah in all commercial transactions including the acceptance of money. Its usage has been throughout history open to Muslim and non-Muslims alike.

All Praise is due to Allah, the most Compassionate, the most Merciful, the Lord of all the worlds, the King of the Day of Judgment, Who has gathered all knowledge in His Essence and Who is the Creator of all knowledge for eternity. All peace and blessings be upon His beloved Prophet, Muhammad, who was not taught by man but by Him, He was the last and most honored Prophet, the last in the chain of prophethood that was brought to this world and has guided us to the right path. May abundant peace and blessing be upon his Family and his Companions, who were chosen among the good and benevolent.
In relation to the present concern of the people regarding the Launching of the Shariah currency in the State of Kelantan on the last 2nd of Ramadhan 1431, as a witness of the momentous ceremony of the Launching in the city of Kota Bharu and as Shariah Counselor of World Islamic Mint, I would like to state in a manner of clarification and support to this initiative the following:
1.- The Gold Dinar and Silver Dirham are not legal tender. Legal tender or forced tender is an offered payment that, by law, cannot be refused in settlement of a debt, and have the debt remain in force. Personal cheques, credit cards, debit cards and similar non-cash methods of payment are not legal tender only the notes and coins of Malaysia are Legal Tender. The issuing of Legal Tender is the exclusive prerogative of the Federal Government and the Government of Kelantan never had nor has the intention to issue Legal Tender as that is legally impossible.
2.- The Dinar and the Dirham are known in the fiqh (see [a] Muqaddimah of ibn Khaldun) as the “Shariah currency”or “Shariah coins”. The term “Shariah coins” is specific to the Dinar and Dirham and is not applicable to any other coin made in gold, silver or any other material. Any other coin is known as “non-shari’i” (ibn Khaldun).
3.-Properly speaking the term “alternative currency” is not applicable to the Shariah coins or currency because the term “Shariah coins” is specific to the Dinar and Dirham and therefore is not alternative to any other coins or currency (non shari’i). It stands on its own without alternative. The use of the expression “alternative currency” can only be used if proper explanation is given in regards to the fundamental differences that exist in relation to the legal tender currencies such as the Malaysian Ringgit. The Malaysian Ringgit is an entirely different legal concept and has different functions. The Malaysian Ringgit is not based on a commodity (in Arabic ‘ayn, meaning tangible merchandise) like the Dinar and Dirham, the Malaysian Ringgit a promissory note (in Arabic dayn, meaning debt or liability) with no intrinsic value (its value as ‘ayn/tangible merchandise is the value of the paper close to zero) but with a fiat value which established by the compulsion law of the Federal Government through the Law of Legal Tender and it can change from time to time. On the other hand, the value of the Dinar and Dirham depends entirely on the market value of the commodity (gold and silver) on which it is manufactured, just like a kilo of rice depends on the value of rice. This difference in important in religious terms, for example, zakat which is a legal obligation of the Shariah has to be paid in ‘ayn but cannot be paid in dayn. (see [b] Al-Kasani). Muslims should, if having the choice(if no choice is given or no ‘ayn is available then darurah, that is exceptionality, is temporarily applicable), pay with ‘ayn rather than dayn.
5.- In linguistic sense, the Dinar and Dirham are not face values, but names that indicate specific weights. The Dinar is a specific weight of 4.25 grams and it is also known as mithqal in Arabic. The Dirham is a specific weight of 2.975 grams or 7/10 of the mithqal. In a way they are legally the same as saying “1kg of rice”. Therefore they are specific weights of commodity (gold and silver) which are mentioned in Qur’an and in many aspects of the Shariah regarding zakat and legal judgments; and thus they cannot be altered in their weight.
6.- In history, the Shariah coins has never been legal tender. In the practice of the early Muslim community the Shariah coins were not only currency used as means of payment. Barley, dates or salt were also used as means of payment and therefore no exclusive right was given to the Shariah coins. The reason for this “freedom to choose the medium of exchange” is that money is considered a part of trading it is regulated under the same Qur’anic injunction that regulates trade: “tijaratun ‘aan taradim minkum”, the meaning of which is “trade according to mutual consent”. “Mutual consent” excludes the idea of compulsion or monopoly in regards to trading. (see [c] Tafsir al-Jalalayn). This is another reason why the Dinar and Dirham are not legal tender and have never been legal tender. Freedom to choose the medium of exchange is a fundamental right granted by Allah to Muslims and non-Muslims alike. The use of the Shariah currency is therefore inclusive of non-Muslims.
7.-The term “currency” is commonly understood as legal tender or as fiat money that carries a face value. Since the “Shariah coins” are not legal tender and do not have a face value the” Shariah coins” should be better understood as a commodity rather than as “currency” in the common use of the term. Regarding current common practices, the use of the “Shariah coins” belongs to the category of barter, that is, the mutual exchange of products and services. It is arguable that in the past, before the introduction of legal tender laws, transactions made with gold and silver were consider normal transactions and the term barter was applicable to all other transactions. Therefore the use of the term “Shariah currency” should be understood with the limitations explained above and in consideration to the historical practice of the Muslims as it is relevant in the Islamic Jurisprudence.
8.- Until very recently in history “paper currencies” were defined as promissory notes in terms of gold and silver. In that sense they represented an ‘amanah’ (trusting wealth to someone who will keep it for you until you demand it) that is an obligation to pay on demand a certain amount of gold and silver. We know from history that this obligation was often not fulfilled and eventually the governments of the world decided gradually to eliminate the obligation to pay in specie altogether. The closest case of the default is the US dollar and its unilateral decision to break their “Bretton Woods Agreement”. This concept of ‘broken amanah’ is known in the Qur’an and carries legal implications as to the prohibition to accept amanah from non-Muslims unless they live under Muslim rule so that they can be obliged to pay their contractual obligations (see [d] Qadi Abu Bakr ibn al-Arabi). This legal injunction, which in theory implies the prohibition to accept British pounds, US dollars, etc. ( or any other currency backed by them), has been abrogated long ago since the colonial days by new laws that consider that this legal injunction is no longer applicable. Under the inspiration of the colonial legal systems, the constitutional Law of all Muslim countries including Malaysia grants the right to accept foreign promissory notes from non-Muslim countries (such as USD) to their own Central Bank (Bank Negara) as a reserve value for their own fiat currency. Because of this many Muslims (and non-Muslims) still mistakenly belief that their own fiat currency is backed by gold and silver when in fact no legal tender in the world is fully backed by specie anymore. The gold dinar and silver dirham are commodities and therefore they are not an ‘amanah: they are a tangible commodity (‘ayn), that is, when you pay with them, you hand over a certain amount of gold and silver and therefore they do not require to be backed by any other asset or authority other than itself. This is another reason why the Shariah currency cannot be compared or considered an alternative to “paper currencies”.
9.- Legal Tender is often a misunderstood concept. Coins and banknotes do not need to be ‘legal tender’ in order to be used as money to buy and perform other transactions for which money is intended. Legal tender must be accepted to settle a money debt. For example, US federal law does not restrict private businesses, persons or organisations in what methods of payment they choose to accept or refuse. Businesses are therefore free to insist on payment by credit card, for example, or to refuse larger denomination banknotes. In Canada for example, only Canadian dollar banknotes issued by the Bank of Canada are legal tender; however, commercial transactions may legally be settled in any manner agreed by the parties involved. A significant amount of business in Canada is transacted in United States dollars, despite United States currency not being legal tender. Legal tender can be refused unless or until a person is in debt, therefore vending machines and transport staff do not have to accept the largest denomination of banknote for a single bus fare or bar of chocolate, and even shopkeepers can reject large banknotes. However, restaurants that do not collect money until after a meal is served (a debt has been created) would have to accept any legal tender. The right of a trader to refuse to do business with any person means a purchaser cannot demand to make a purchase, and so declaring a legal tender other than for debts would be redundant.
10.- The minting of the Dinar and Dirham is a known practice of the Muslims from the early days of Islam. The first dated coins that can be assigned to the Muslims are copies of silver dirhams of the Sasanian Yezdigird III, struck during the Khalifate of Uthman, radiallahu anhu. These coins differ from the original ones in that an Arabic inscription is found in the obverse margins, normally reading “in the name of Allah”. Since then the writing in Arabic of the name of Allah and parts of Qur’an on the coins became a custom in all minting made by Muslims. In the year 75 (695) the Khalif Abdalmalik ordered Al-Haddjadj to mint the first dirhams, officially establishing the standard of Umar ibn al-Khattab, radiallahu anhu: 7/10 of the mithqal. The next year he ordered the dirhams to be minted in all the regions of the Dar al-Islam. He ordered the coins to be stamped with the sentence: “Allahu Ahad, Allahu Samad”. The minting of the coins is considered an obligation of the Sultan that needs to be followed (see [e] al-Qurtubi).
And Victory belongs to Allah. In Him we trust and praise belong to the Lord of the worlds and peace and blessings on His Messenger.
The slave of Allah, Hajj Abdalhasib Castineira, in Kuala Lumpur, on the 5th of Ramadhan, 1431.


NOTES
A] Imam Abu Zayd Ibn Khaldun (d. 1406)
“The Revelation undertook to mention them and attached many judgments to them, for example zakat, marriage, and hudud. Therefore within the Revelation they have to have a reality and specific measure for assessment (of zakat, etc.) upon which its judgments may be based rather than on the non-shari’i (other coins).
Know that there is a consensus (ijma) since the beginning of Islam and the age of the Companions and the Followers that the dirham of the shari’ah is that of which ten weigh seven mithqals (weight of the dinar) of gold… The weight of a mithqal is seventy-two grains of barley, so that the dirham which is seven tenths of it is fifty and two fifths grains. All these measurements are firmly established by consensus.”
“Al-Muqaddimah”

B] Imam Abu Bakr al-Kasani ( d.1191)
“If the property on which zakat fell due is dayn, as distinguished from ‘ayn, its zakat may be settled in terms of ‘ayn wealth. Thus a person having a claim of two hundred dirhams on which zakat is due, may give, in settlement of the same, five dirhams in cash, because dayn as compared with ‘ayn is defective (naqis) and the ‘ayn is complete (kamil), and a settlement of the defective in terms of the complete is valid. On the contrary, the settlement of the complete ‘ayn in terms of the defective (dayn) is not valid, and therefore, the zakat debt is not discharged if a person wants to pay the zakat of two hundred dirhams which he possesses (i.e. ‘ayn) in terms of the five dirhams which a poor person owes him (i.e. dayn); namely, by absolving him from the debt intending it for his own zakat debt on the two hundred dirhams.”
“Bada’i` al-Sana’i”

C] Shaykh Jalaluddin al-Mahalli & Shaykh Jalaluddin al-Suyuti
Allah says in the Qur’an (4, 29):
{ يَٰأَيُّهَا ٱلَّذِينَ آمَنُواْ لاَ تَأْكُلُوۤاْ أَمْوَٰلَكُمْ بَيْنَكُمْ بِٱلْبَٰطِلِ إِلاَّ أَن تَكُونَ تِجَٰرَةً عَن تَرَاضٍ مِّنْكُمْ وَلاَ تَقْتُلُوۤاْ أَنْفُسَكُمْ إِنَّ ٱللَّهَ كَانَ بِكُمْ رَحِيماً }
Tafsir:
“O you who believe, consume not your goods between you wrongly, unlawfully according to the Law, through usury or usurpation, except it be trading (tijāratan, also read tijāratun), so that the goods be from trade effected, through mutual agreement, through mutual good-will: such [goods] you may consume. And kill not yourselves, by committing what leads towards destruction on account of some affiliation, be it in this world or the Hereafter. Surely God is ever Merciful to you, when He forbids you such things.”
“Tafsir al-Jalalayn”


D] Qadi Abu Bakr Ibn al Arabi (d. 1148)
Allah says in the Qur’an (3:75):
“And amongst the People of the Book there are those who, if you were to entrust them with a treasure (qintar), he would return it to you. And amongst them is he who, if you were to entrust him with a dinar would not return it to you, unless you kept standing over him. “
Tafsir:
“the benefit that can be taken from this is the prohibition of entrusting (amanah) the People of the Book with goods. The question concerning entrusting property is legislated by the text of Qur’an.”
“Ahkam al-Qur’an”

E] Imam Abu Abdallah Al-Qurtubi (d. 1273)
Allah says in the Qur’an (4:59):
“O you who believe! Obey Allah and obey the Messenger and those in command among you..”
Tafsir:
“The ayat is an order to obey the Sultan in respect to seven obligations: the minting of the dinar and the dirham, fixing weights and measure, legal judgments, Hajj, Jumu’ah, the two Eids and Jihad.”
“Al-Jami’ li-Ahkam al-Qur’an”

Praise be to Allah, the Maker of the heavens and the earth. I bear witness that there is no ilaha except by Allah and I bear witness that Muhammad is the Messenger of Allah.

This blog is dedicated to present to the world the incoming Islamic revolution which will return Muamalat as the basis of the Islamic way of life and will start the glorious path to the return of the Khalifate. This revolution is inevitable.

There are many revolutions but only one is decisive, complete and just, that is Islam. The challenge of the thinking man is to discover Islam pushing away the false Puritanical façade presented by modern Arabs. If you are lucky and you have the freedom and the resolve required, then Islam will open up for you. The reward is that you will be able to “see”. The monetary issue represented by the Gold Dinar is only the tip the iceberg of a larger constructive revolution we call Muamalat. Muamalat is the living model of Islam abolished since the fall of the Khalifate and the beginning of the constitutional period which today enslaves the world and the Muslim Nation in particular. All Constitutions are fashioned with the same imprint of the false modern religion which is capitalism. Three elements uphold the grip of usurious slavery in all constitutions: Central Bank, Legal Tender and National Debt. All three are profoundly contrary to Muamalat, that is, to Islam. Thus the idea of an Islamic constitution is like the idea of a Islamic whisky: absurd. You should see in this matter two things: one is the level confusion of Puritanical Islam represented by the wahabbism installed by force in the Arabian Peninsula; and two and most important the depth of the revolution that is to come. Constitutions, once seen as the spirit of freedom, are now -for those who can see- the instrument of massive slavery by usury.
Regarding the money issue, it must be understood that we care for gold and silver as much as we care for potatoes. It is not the virtues of the metal as currency (which are many), what matters to us is freedom. Allah says in the Qur’an: “Trade with mutual consent”. He doesn’t say “trade with mutual consent except with money”. No. Money which is not freely chosen is just a fraud, a legal robbery and in the larger extent slavery. The issue of the Gold Dinar is FREEDOM.  People are either free to choose their medium of exchange or are slaves to the masters of the credit-money system. This generation of ours is the victim of the most inhuman, unjust and murderous social system the world has ever seen: capitalism as its near-zenith. This time is by far the darkest in the last 1,400 years since the arrival of the Messenger of Allah (may Allah grant him blessings and peace). To allow a piece of paper to dictate the life of the masses only shows the extraordinary degree of blindness driven by fear and their inability to think (science doesn’t think, said Heidegger) that dominates our modern life. Taking science as the Truth, when science is incapable of thinking the Truth, is as lucid as a caravan led by a blind man. Take for example the most idiotic and senseless of all science, Economics. If anyone of you cannot see that it is because you are still blind. You might need a miracle. Your educated reason won’t help you.

When we Muslims free ourselves from our own demons, namely, the curse of false Protestant-Puritanical Islam which took over after the political vacuum created by the fall of the Khalifate, you will see an Islam that some of you will be able to recognize. Islam is the pure religion. It is written in each one of us, believer or non-believer, and when the time comes the recognition follows. Our revolution is a restoration of the meanings: when “the light comes the darkness disappears”. There are not two powers in the universe, only One. There is no power except by Allah. Victory belongs to Allah.

Wa la ghaliba illa Allah.

It starts here and now, everywhere and at every moment.

Umar Vadillo