Institute of Islamic Banking

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Browsing Institute of Islamic Banking by Author "Aziz Ur Rehman"

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    Legitimacy of Bai’a Al Urboon; an Investigational study
    (University of Management and Technology, 2017) Aziz Ur Rehman
    A Professor at Cambridge University London argued if the Islamic Banking system is truly Shari'ah Compliant then what is the Shari'ah justification for the Urboon (the Earnest money) in case if the buyer is unable to complete the deal? This was a moment which inspired the researcher to answer the question.Through this study, theresearcher conductedan in-depth research and concluded that some Fatawa and Shari'ah edicts are famous and people are following it but in fact there is no base for that. Bai'a Al Urboon is one such practice that accepted as the normal but without any firm grounding in the Islamic Financial System.In fact, some Shari'ah Scholars taking the advantages of thumping and exceptional Fatwa and using it as a common ruling. The researcher studied and researched books, articles, papers, etc. searching for a concrete basis for “Legitimacy of Bai'a Al Urboon” based on the principles of Fiqh and Shari'ah. This is a qualitative research collecting of the opinion of four school of Fiqh and highlighting the correct Shari'ah edict and rulings. Researching and reading through books, papers, articles and other supporting material provided an exceptional opportunity to learn the fundamental underlying principles of the Islamic financial system. It created an excellent niche for the development of a fast-growing industry. This research hopes to align further align our financial system with the core Islamic financial guidelines. The importance of this research lies in the need to protect the Islamic Finance industry and its clients from being in doubts and guilty in future. Malaysia started financing based on Bai'a Al Einah and after 20 years they announced that it is Haram. They cannot justify and satisfy their clients who invested and received profits in this 20 years. Dubai Islamic bank started Bai'a Al Salam based financing and after years they stopped it reasoning that this is Haram. Dana Gas issued Sukuk and after 2 years it was announced that such Sukuk are not a Shari'ah Compliant Sukuk. National Bonds Corporation facing objections on their Prospectus and on process on Sukuk Murabaha. Why the industry experts have been forced to argue and justify the wrong practices with weak quotes. The researcher tried his best to protect the industry and highlight the weak basis of Bai'a Al Urboon.