Saturday, 9 June 2018

The rulings of debt reselling in Islam


Text Box: Student Name: Omar Camara
Student ID: 10070666
 Course Name/Code: ECM301
Assignment Question: _2
Attempt Count: _1


 

 

 

 



                                     Allah (S.W.t) make anything permissible that will be maintain justice, harmless to the individuals, families, societies, countries and the world.  And forbid anything will that will create injustices, harm peoples, families, societies, countries and the world at large. From majelle the aricle  the sale of debt or Dyn is been define as “the thing due which can be in the form money or commodity been owed by a certain debtor”  this sale can be payable duty or receivable  debt to the debtor himself, or to any third party a paid instantly or for delayed the payment.  There are no unauthentic on the forbiddance of sale of debt in the holy Quran and the authentic Sunnah at this moment; there are different ruling among traditional Muslim scholars concerning on the acceptability of the sale of debt. The secondary marketplace of debt (debt reselling) and debt based securities is possible through Bai-al Dayn as in an occasion of a diversity of Malaysia-based sukuk. Conversely  Jumhur  Scholars  does not accept it, despite the fact  debt represent  by sukuk is reinforced or supported  by an underlying  assets. The custom Muslim jurists are undisputed on the opinion that Bai al Dayn using discount or premium is not permissible in shariah. 

                                    The awesome preponderance of modern Shariah scholars are also on in the same opinion. Before going further I will like to first and foremost, the debt reselling has different rulings, some of the Muslim scholars permitted with a condition to make the transactions valid and which I am on support of provided that the condition has been fulfilled , while in the other hand some jurist forbids it with a reasons why the transaction is not permissible in Islam.

1)      Why the reselling of debt is permitted in Islam…?
2)      Why the reselling of debt is not permitted in Islam…?

                                  It is permitted to trade a confirmed debt to a third party for the reason that these debts are deliverable without obstacles or impediments in the transactions. Correspondingly, the Maliki madhab has permitted the sale of debt subject to with extra circumstances  to be  fulfilled.  

                                 Firstly the reason known why the reselling of debt known as “Bai‘al Dayn” is allow in Islam. , the sale of debt must be obeyed strictly to the forbidden etc.  riba and gharar.  However, the debt is unsecured,  somewhat asset base and well secured. Its disbursement almost convinced and make sure there is no question about the uncertainty known as gharar. According the jurist  give its rulings in various circumstances appear to fit the changed veracities of the contemporary times. 

                                Secondly, it is an obligation that the transaction should not include food items or money or somewhat ever ribawi item that had been stated in the hadith and evidently, trading currency for currency is not permitted.

                                Thirdly, the debt is an obligatory to be sold to the former, to the formal act of receiving or likewise vending of the liquidated debt would be imbalanced to the fresh creditor.  

                                 Fourthly, a particular price of sale requirement has to be paid straightaway in order to circumvent the vending (selling) of debt for a debt (kali bi al kali) which is forbidden in the shariah perspectives. The borrower is required to acknowledge his/ her in order to avoid uncertainty  in the transaction that may lead to invalidate the debt and also the borrower is required to takeover  duty of the debt. Most vitally there is no enmity subsists amongst the Brower and buyer. 

                                   Fifthly, an individual price sale requisite in various geniuses from the debt to circumvent or avoid the riba al-fadl. Furthermore, is an obligation upon the borrower to be present for the duration of the conclusion of sale flanked by the seller and fresh purchaser.  Therefore his monetary upright is known to the purchaser. 

                                  From the point of view of imam Maliki, is that if all the stated conditions are destined to protect the like hood of nonpayment of debt or non-delivery of debt to the fresh creditor and borrower (debtor) do not control them against their wishes  or subjected to unfairness. According to his opinion, he says this is applied and would serve by means of credit risk’s extenuation or mitigation  in contemporary Islamic Finance.
                                  Lastly if all this rulings  can be collected ; as general principle ,trade of debt at its equal value and the spot payment is permitted in Islam. From the majorities of the jurists, this permitted ability is supported by a Hadith related by that Abd Allah Ibn Umar, said, , “I came to Prophet (s.a.w.s) and said, I sell a camel in al Baqi, with the price denominated in gold coins and collected in silver coins and sell them in denominated silver coins and collecting in gold coins” prophet (S.A.W) then said, “there is no harm in a condition that  you receipts it at its spot price, provided that you do not depart without completely finalizing  the transaction”.   On the behalf of this hadith, sale of debt was opined to be  ratified  by prophet Muhammad (S.A.W) (Wahbah Zuhayli, 2003) this ideal is later endorsed as a result of the Islamic Fiqh of Jeddah, they held that sale of debt for prompt payment is allowed in 2002.in order words, debt is required to be sold at the equivalent value; it should be more or lesser any extra amount accumulating as of the sale of debt is amount to  riba.

                                   The reasons why debt reselling Islam, is not permissible according to the majority of the Umala or scholars their views concerning the types of transaction that make it forbidden in Islam and we  practice it in our societies and countries at large. These views are as follows.
The “Al Ka_li bil K_ali”, a maxim in the Fiqh literature prohibits the sale of debt, of exchanging of two things both of which are delayed or account value for other delayed counter value.

                                 The rehearsal of Bai‘ al K_ali bil K_ali was widespread amongst the Islamic jahiya Arabs  period and also called Bai‘ al-Dayn bid-Dayn. What is forbidden as a result of this agreement is the purchase by a man of commodities on the credit for a fixed time, and, at what time period of recompense comes and he then relies that he is shortage of money to pay the debt, he then  said: “Sell it to me on credit for  extra time, for something extra”. There is report from  Prophet Muhammad (S.A.W) prohibited such kind of sale. This rule has nearby worldwide application and has earned canonical power in Islamic rule as Ijma‘a or consensus.  

                                 A credit manuscript developing from any deal of credit sale signifies a debt which Can’t be sold according to Shariah law due to the involvement of uncertainty known as Gharar or Riba. A dealer vending a commodity on credit and thus having a bill of exchange, in Islamic finance you can’t sell a promissory note as t is been practice in a conventional bank system. In other way, the bank can be serving as trader and purchase the commodity as of its producer and formerly sell it to another person who requests it on credit, keeping a margin for himself.  “Whoever buys foodstuff should not sell it until he has received it in full.” Ibn ‘Abbas said, “And I think that the law of everything is as foodstuff.” (Muttafaqun ‘alaihi) from this hadith we learn that sell something until he has received it in full.

                                  In conclusion Selling of debt in the form of promissory notes is forbidden the evident is Centered on the transaction, that is forbidden is Islam to work in the corporations and institutes in which they buy people’s debts, either by using method of letters of credit, checks and in phone bills form etc. this an advice to those go counter the command be careful about trials and tribulations of Allah (S.W.T) befall them). An individual who wishes to work in this kind of businesses should comprehend that, moreover when you let go off something for the sake of Allah (S.W.T), Allah will compensate that individual with something healthier than that. As Allah (S.W.T) said in (Quran, Saratul -Noor 24:63)and whosoever fears Allah and keeps his duty to him, He will make a way for him to get out from any difficulties. And he also said in (Quran, Suratul Talaaq 65:2-3) that He will provide him from (sources) he never could imagine.is it good to follow what whatever is permissible in Islam and prohibit those that Islam prohibit.


Bibliography

Arifin, D. M. (2013, January 8). SYARIA. Retrieved from Question and Answer: http://syaria.com/413-question-and-answer-property-business.html
Ayub, M. (2007). Understanding Islamic Finance. West Sussex: John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester,.
Munajjid, S. M. (2017, December 18). Islam Question and Answer. Retrieved from Islam Infor: https://islamqa.info/en/147783
Quran. (Saratul -Noor 24:63).
Quran. (Suratul Talaaq 65:2-3).
Wahbah Zuhayli. (2003). Selling of debt.

















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