Monday, February 19, 2007

(18) Fatwa against Albaraka & Oasis

>>> "Darul Iftaa" <10260081@yebo.co.za> 2007/02/02 02:28 PM >>>

Question:

1. Could you please advise if the returns from a savings account or general investment account in Albaraka Bank are halaal or not?

2. Also, are similar investments in the Crescent Oasis fund halaal?

3. if not, is there ANY known organization where one can invest his savings for halaal returns (besides property which may not be affordable)?

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Muhtaram, Assalaamu `alaykum waRahmatullahi Wabarakatoh
In the name of Allah, Most Gracious, Most Merciful

1. We do not regard the returns from Albaraka Bank to be Halaal. In the past we have tried, with much frustration, to communicate with them but they have shown clear reluctance in being transparent as far as Shariah Compliance is concerned. We have been through some of their contracts and workings, and found them to be seriously flawed.
AlBaraka does not have any local Aalim on its so called Shariah Supervisory Board. If there is any local Aalim who approves of their products, we would like to know his name in order to engage with him on the issues.
In the light of this, it is our duty to caution the Muslim public from investing with AlBaraka Bank.

2. Similarly, the returns from Oasis Crescent Fund are not Halaal. We had met with them, but they were unwilling to divulge details of their investment portfolios. When we expressed our disapproval of their products on our website, they threatened to take us to court. What is particularly disturbing is that this company is owned and run by Muslims, but some of their products are without a shadow of doubts clearly haraam. When they themselves are engaged in haraam, what trust can one have that their so called "halaal" products are in fact acceptable in Shariah?

3. Unfortunately, we receive this type of query very often, but have no solution on hand. Many people are looking for purely Halaal investment portfolios. Since we are not in the business field, the solution would lie with businessmen who have good entrepreneurial skills. They should come up with such products. We would be most glad to contribute in as far as the Shariah Compliance is concerned.

I assure you that there is a huge market just waiting to flood funds into an investment scheme that is thoroughly vetted and approved by the Ulama. We therefore would like to invite all businessmen to apply their minds in this direction, and come up with a viable investment scheme run strictly according to the Shariah.

Those interested should feel free to contact us.
And Allah Ta'ala knows best.
Was salaam
E. Vawda, for Daarul Iftaa

Checked and approved: Mufti Ebrahim Desai Saheb.
Fatwa Dated: 1st Feb. 2007 ____
Visit us at: http://www.alinaam.org.za http://www.askimam.org

4 Comments:

Anonymous Anonymous said...

Statement on Shariah Compliancy of Albaraka Bank Limited

Respected Client,

The Muslim Community in South Africa is constantly faced with the challenge of ensuring that their dealings comply with Shariah. With the Interest Based Banking system having gripped nations all over the world, providing an acceptable alternative to the Riba based banking system has become a burning issue of the time.

Albaraka Bank Limited’s mission is to reflect Islamic Economics Principles in all its operations and products and is therefore dedicated to providing this alternative and fulfilling the need of providing a Banking solution consistent with the principles of Shariah.

The Bank strives to achieve this by providing financial products that conform to the principles of Shariah. Furthermore, any queries received from clients or staff members and the public, on products, procedures or even general issues pertaining to Shariah Compliance are tabled at monthly Internal Shariah Committee meetings. The Bank has an Independent Shariah Supervisory Board which meets on a regular basis to resolve issues tabled at the Internal Shariah Committee.

Together with the guidance of the Shariah Board, the Bank uses the Islamic Banking Standards set by AAOIFI - The Accounting and Auditing Organisation for Islamic Financial Institutions, as a basis in its operations. The Bank has chosen to adopt these standards in order to ensure consistency and compatibility of its applications with the International Islamic financing arena.

AAOIFI (The Accounting and Auditing Organization for Islamic Financial Institutions) was established in Algiers on 1 Safar 1410AH corresponding to 27 March 1991 and is based Bahrain.

One of the primary objectives of AAOIFI is to prepare, promulgate and interpret Shariah standards for Islamic Financial Institutions in order to achieve harmonization in the application of Islamic Financial concepts among the Shariah supervisory Boards of Islamic Financial Institutions and to avoid contradiction or inconsistency between the Fatwas issues by different Islamic Scholars around the world. The Shariah Standards are prepared by a group of highly qualified Ulama selected from all over the world. The Shariah Board of AAOIFI is currently chaired by Mufti Taqi Usmani.

Over the years, AAOIFI has taken significant steps to encourage the application and enforcement of its standards throughout the world. The standards issued by AAOIFI are used as guidelines by many government regulators in jurisdictions such as Bahrain, Sudan, Jordan, Malaysia, Qatar, Saudi Arabia, Dubai and Lebanon. Most recently, Syria has signed an agreement to mandate and adopt AAOIFI's standards.

AAOIFI has received acceptance from Islamic Financial Institutions internationally. Membership of AAOIFI continues to expand and now stands at 115 members from 27 countries. This steady progress is a reflection of the confidence placed on AAOIFI internationally as the leading representative of the industry.

Whilst the Bank primarily adopts the rulings of the AAOIFI Standards and Albaraka’s Independent Shariah Supervisory Board in its procedures and products, we recognize the leadership role that the Ulama play in the community. In this context, any inputs and suggestions received are treated with utmost priority and importance.

We pray that Allah give us the ability to work in unity to strengthen the Ummah in general and specifically the Islamic Economic System.

We welcome any suggestions or advice that may be helpful to us in ensuring adherence to Shariah and thereby attainment of our ultimate objective, to please our Creator. We will always continue to play a leading role in a transparent and proactive manner in our effort to strengthen the Islamic Economic System.

February 19, 2007 5:14 AM  
Anonymous Anonymous said...

slms. want halaal banking??? buy gold and keep it under your mattress. alternatively accept the fact that ALL, yes that's correct, ALL banks are connected to a reserve bank and follow all the rules of our current economic system where money is NOT resource based. within this system ribbah (using whichever definition blows your hair back) does exist but if that gives a person grief then they should not even begin to examine the principals of financing. we are existing in a greater system that can have no independant sub-systems no matter how hard we try. there can never exist shariah comliant banking if all banking is not shariah compliant, again that is strictly tied to a persons definition of what is shariah compliant.

as for the Oasis thing, all it is is a basket containing shares of certain companies. yes in theory that is very easy to say which companies are clear-cut halaal or not. here's the problem, companies own and are owned by other entities. question is, how strict do you want to define the "halaalness" and/or "haraamness" of ownership. is a company that makes glass halaal to invest in even though there may be ownership in that company by an institute that is also proffitting of a beer manufacturing enterprise??? the reality is that the only way to have a strictly halaal portfolio is either to not invest at all or become a private trader/investor and research all the companies that one decides to invest in.

February 19, 2007 5:46 AM  
Anonymous kv said...

assalaamu alaikum akhi

what do albaraka and oasis have to say about this?
just so we can get both sides of the story...

February 20, 2007 1:20 AM  
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