Loan (Qard) - Appendix B (The Shariah Basis for the Standard)

Transcription

1. Shari ’ah Standard No. (19): Loan (Qard) Appendix (B) The Shari’ah Basis for the Standard ■ The basis for stipulating that wealth given as Qard be known is to enable the borrower to return a similar substitute of the wealth of Qard. ■ The basis for the rule that the borrower does not come to own the wealth lent except through possession is that the contract of Qard is one in which commutative aspect and that of donation stand combined, however, the act of donation is predominant. It is for this reason that the rule is similar to that for gift (Hibah) in which ownership is transferred with the taking of possession. ■ The basis for the rule that the subject-matter of Qard be a fungible item is that it is only such an item that can be returned by the borrower. Further, fungible items are compensated through similar substitutes in usurpation and destruction. ■ The basis for the obligation of returning the counter-value of Qard at the same place where it was granted, when there is no contrary stipulation, is that this is the governing rule. Stipulation of an Excess in the Counter-Value of Qard ■ The basis for the prohibition of stipulating an excess in the counter-value of Qard for the lender are evidences from the Qur`an, the Sunnah, consensus of Fuqaha (Ijma’) as well as rational arguments that convey the prohibition of Riba (usury) in Qard. Stipulation of Repayment in a Land (Place) Other Than That of Qard ■ The basis for the permissibility of repayment in a land other than that where Qard was granted so as to provide a facility to the borrower whether or not the lender benefits from this, is as follows: 1. The reports(2) from the Companions, may Allah be pleased with them, which indicate the permissibility of stipulating repayment in (2) “Al-Musannaf ” by Ibn Abu Shaybah [6: 279]; and “Al-Sunan Al-Kubra” by Al-Bayhaqi, [5: 352]. 526
2. Shari ’ah Standard No. (19): Loan (Qard) a land other than that where Qard was made. This is a view upheld by the Malikis and the Hanbalis and it was preferred by Ibn Taymiyyah and Ibn Al-Qayyim Al-Jawziyyah. 2. The stipulation of repayment in a land other than that of the Qard is in the interest of both the lender and the borrower without causing injury to either along with the existence of a need. The Shari’ah does not lay down the prohibition of interests that bear no injury. In fact it lays down their permissibility. It does prohibit those that are injurious, but here the benefit is mutual and they are cooperating to arrange this. It, therefore, belongs to the category of cooperation and participation. 3. The basic rule in transactions (Mu’amalat) is permissibility, and the stipulation of repayment of a loan in a land other than that of the Qard is not expressly prohibited by the texts, nor is the meaning expressly stated in the texts so that prohibition could be extended through analogy. Thus, the repayment falls under the rule of permissibility. Stipulation of a Period in Qard ■ The basis for the permissibility of stipulating a period in Qard, for Qard can be delayed by stipulating a period, are evidences about the permissibility of a period of delay, the obligation of abiding by conditions and contracts, for the realisation of the purposes of the Qard, and for repelling injury. Stipulating a Contract of Sale within the Contract of Qard ■ The bases for the prohibition of stipulating a contract of sale within the contract of Qard are the following: 1. The saying of the Prophet (peace be upon him): “A Salaf (loan) and sale (in one contract) are not permitted nor are two conditions in a sale nor the profit from a thing for which the liability for loss is not borne nor the sale of what you do not have”.(3) (3) Related by Abu Dawud. The text of this Hadith belongs to him as narrated from Abdullah Ibn Amr Ibn Al-’Ass (may Allah be pleased with him), chapter on the person who = 527
3. Shari ’ah Standard No. (19): Loan (Qard) 2. The underlying reasoning is that the word Salaf in the words of the Prophet (peace be upon him): “A Salaf (loan) and sale (in one contract) are not permitted”, permitted”, means Qard. The Hadith in indidicates the impermissibility of combining a Qard and a sale in a single contract. The generality of its meaning includes the impermissibility of stipulating a contract of sale in a contract of Qard as well as the impermissibility of stipulating a Qard contract within a contract of sale. 3. The stipulation of a contract of sale within a contract of Qard is a means towards obtaining an excess in Qard as he may oblige him with respect to the price for the sake of Qard, and in this way the Qard will be created with a stipulated excess, which is Riba. These are means that, by agreement, are to be prevented and blocked. 4. The stipulation of a contract of sale within a contract of Qard removes the contract of Qard from its main purpose, which is to provide a facility. The reason is that Qard is not a commutative contract, it is rather a contract of piety and virtue; thus, it is not valid if compensation is stipulated in it. If Qard is linked to a commutative contract, it will receive a part in the compensation and this will take it out of its required purpose. This will nullify it and nullify the commutative contract linked to it as well. ■ The basis for the prohibition of a stipulation by the lender that the borrower gives him a gift is that in reality this amounts to Qard with an excess that is stipulated for the benefit of the lender and this excess is the gift. Thus, it amounts to prohibited Riba and removes the contract from the category of a compassionate contract moving it to one of Riba. Further, this stipulation = sells what he does not have, “Kitab Al-Buyu’” Al-Buyu’”,, (H: 3504): “Sunan Abu Dawud” [3: 283]; Al-Tirmidhi, chapter on the disapproval of selling what one does not have, “Kitab AlBuyu’” (H: 1234): “Sunan Al-Tirmidhi” [3: 526-27]; Al-Nasa`i, chapter on two conditions in a sale, “Kitab Al-Buyu’” (H: 4644): “Sunan Al-Nasa`i” [7: 340]; Ahmad in “Musnad Al-Mukthirin Min Al-Sahabah” (H: 6633): “Musnad Ahmad” [2: 3730] through different channels, all of them: From Ayyub, who said: “Amr Ibn Shu’ayb related to me saying, ‘My father related to me from ...’ till he mentioned Abdullah Ibn Amr reporting it”. The Hadith is deemed hasan Hadith, but rises to the level of Sahih Li-ghayrihi due to its numerous channels. 528
4. Shari ’ah Standard No. (19): Loan (Qard) generates a benefit for the lender and the Jurists have unanimously agreed that any contract that yields a benefit stipulated for the lender is impermissible. The benefit in this stipulation is that the lender will benefit from a second loan from the borrower, and this benefit is not in lieu of anything other than the very Qard that he gave him. Stipulation of a Reward for Raising Loans on the Basis of CreditWorthiness ■ The basis for permitting the stipulation of a reward for raising loans on the basis of credit status is that this is a counter-value for a service rendered, and this is what is upheld by the Jurists that a reward may be acquired for recommendations and lending of status. Charges for Services Actually Rendered ■ The basis for the permissibility of the lender charging only what is equivalent to the actual costs incurred is that these are in lieu of the costs alone. The lender is doing a favour and the person doing a favour is not to be penalised. The basis for the prohibition of charging in excess of this is that in such a case it would amount to an excess in lieu of the Qard. Resolution No. 13 (1/3) was issued by the International Islamic Fiqh Academy (OIC) regarding the recovery of actual costs. Material Benefits at the Time of Repayment That Are Not Stipulated ■ The basis for the permissibility of giving an excess, in terms of quantity or quality, at the time of repayment by way of generosity and goodwill, when these are neither stipulated nor is there a practice of paying them, is the Hadith reported from Abu Rafi’, may Allah be pleased with him, that the Messenger of Allah (peace be upon him) borrowed a very young camel from a man and then wished to present to him one of the camels of the Sadaqah (Zakat), so he asked Abu Rafi` to repay the man his camel. Abu Rafi’ returned it to him and said, “I do not find anything there except a full grown four year old camel.” The Prophet (peace be upon him) said, “Give him this camel. The best people are those who do better in of repayment”.(4) It is reported from Abu Hurayrah that a man came to the (4) Related by Muslim in his “Sahih” in the Book of “Musaqat” “Musaqat”,, chapter on the person who borrows may return what is better. 529
5. Shari ’ah Standard No. (19): Loan (Qard) Messenger of Allah (peace be upon him) seeking alms. The Messenger of Allah (peace be upon him) borrowed food amounting to one-half of a Wasq and gave the man this. When the lender came demanding his loan, he gave him a full Wasq saying, “One-half of this is your repayment and the other half is a present from me” me”.(5) Material Benefits Not Stipulated Prior to Repayment ■ The basis for the prohibition of material benefits not stipulated prior to repayment, unless these benefits are not for the sake of Qard or in lieu thereof, are the following: 1. From Anas Ibn Malik, may Allah be pleased with him, who said: “The Messenger of Allah (peace be upon him) said, `When one of you grants a Qard and a gift is made to him by the borrower or he offers him a free ride on his animal, he is not to accept this from him, unless such a practice was prevalent among them prior to the Qard’.”(6) 2. Reports of precedents laid down by the Companions, may Allah be pleased with them, which indicate the prohibition of accepting the gift of the borrower and other types of benefits, unless there is an evidence that this is not for the sake of the loan, and that the lender responds with a similar gift or adjusts it as repayment of the debt. Current Accounts ■ The basis for the determination that current accounts constitute loans (Qurud), are the following: 1. That the bank comes to own the deposits in the current accounts and has the right to undertake transactions in the amounts and to seek growth in them (through investment). Further, it is under an obligation to return a similar amount on demand. This is the very meaning of Qard, which is the giving of wealth to one who benefits from it -that is, employs it and consumes it in pursuit of his aims- and then returns its countervalue. This differs from Wadi’ah (deposit) in the terminology of Fiqh, which is wealth deposited with a person for safe-custody so that he does not employ the wealth and returns this very wealth to the owner. (5) Related by Al-Bayhaqi, “Al-Sunan Al-Kubra”, Al-Kubra”, [5: 351]. (6) Related by Ibn Majah in his “Sunan” (H: 2457). 530
6. Shari ’ah Standard No. (19): Loan (Qard) 2. It is binding on the bank to return a similar amount on demand for the current deposit, and it guarantees such return even upon loss of the wealth, whether or not it was negligent. This is the purpose of the contract of Qard, as against Wadi’ah in Fiqh terminology insofar as the Wadi’ah is a trust in the possession of the custodian, thus, if it is destroyed due to his transgression or negligence, he is held liable for it, but if it is destroyed without such transgression or negligence, he is not liable. Resolution No. 86 (3/9) was issued by the International Islamic Fiqh Academy (OIC) regarding the status of current accounts. ■ The basis for the permissibility of the bank demanding service charges -for maintaining current accounts- for the services rendered, is an excess over the duty owed by it, because it is entitled to such charges in lieu of the acts undertaken by it and services rendered to the client. ■ The basis for the permissibility of the owner of a current account utilising a chequebook and ATM card without compensation are the following: 1. The additional benefit arising out of this issue is common for both parties -the lender and the borrower- as both benefit from it, thus, both benefits are set off against each other. In fact, the benefit that goes to the client through the issuance of a chequebook and an ATM card is secondary and is not a primary benefit insofar as the bank has set up this system for serving its own numerous aims and objectives, thus, the benefit accruing to the bank from this system is a primary benefit, while the realisation of the benefit for the client from this system is a consequence of the employment of this system by the bank for its aims and objectives. 2. The benefit derived by the owner of a current account -the lenderfrom this system without a counter-value is not a benefit separate from the Qard. In fact, it is a means for the satisfaction of the loans acquired by the bank insofar as these are ways for the repayment of loans for every lender as when he demands them. ■ The basis for the prohibition of presents and gifts, when the underlying cause is Qard, insofar as the bank gives these presents and gifts to one who gives it a Qard, is that these are by way of gifts to the lender prior to 531
7. Shari ’ah Standard No. (19): Loan (Qard) the satisfaction of the loan when these are due to the Qard.(7)As for the basis of presents and gifts in general, they are not related to Qard and there is no suspicion about them. Overdrafts between the Institutions and Their Correspondents ■ The basis for the permissibility of overdrafts between institutions and their correspondents is general need and that the benefit derived from this practice is not specific to the lender alone. In fact, the benefit is mutual. Further, it does not fall under the category of Qard rather it is a step for transacting with one who deals with you. Thus, the issue does not resemble the case of “You give me a loan and I will give you a loan.”(8) (7) Resolution No. (355) of the Shari’ah Board of Al Rajhi Banking Corporation was issued with respect to presents and gifts in lieu of loans (Qurud). (8) “Al-Mughni” by Ibn Qudamah, [6: 436]; Resolutions and Recommendations of Al Baraka, No. (8/10) and (11/6); Shari’ah Rulings on economic Matters, issued by Bayt Al-Tamwil Al-Kuwayti, [1: 178]. 532