The document discusses Islamic banking principles. It defines different categories of rulings in Islamic jurisprudence - obligatory, unlawful, recommended, permissible, and disliked. It then explains each category. The document also discusses the pillars of Islam and how banking activities fit within economic and social activities. It provides definitions of conventional and Islamic banking, noting that Islamic banking adheres to Shariah principles. The document addresses some common objections to Islamic banking such as the prohibitions of riba and ensuring sources of income and expenditures are halal. It provides contact information for questions.

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ISLAMIC BANKING
BY
MUFTI ASAD GUL
ISLAMIC BANKING OFFICER
THE BANK OF KHYBER
1Feb 02 , 2016

2. Observed through the Al Ahkam (rulings)
upon which Fiqh (Islamic Jurisprudence)
rotate around. The rulings are categorized as
follows:
 a. Wajib (obligatory)
 e. Haram (unlawful)
 b. Mustahab (recommended) (Sunnat)
 c. Mubah (permissible)
 d. Makruh (disliked)

3.  Wajib- An obligatory action or something that shall be
performed. Anyone who leave it is liable to gain the
punishment of Allah s.w.t. in the Here after as well as
a legal punishment in this world.
 Haram- An unlawful action or the one that shall not be
performed and is strictly prohibited. Anyone who
engages in it is liable to gain the punishment of Allah
s.w.t. in the Here after as well as a legal punishment in
this world.
 Mustahab- A recommended action or something that
should be performed.
 Mubah- A permissible action or something that is
neither encouraged nor discouraged.
 Makruh- A disliked action or something which is
abominable and should be avoided but not in strictly
prohibitory terms.

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Islam
Aqidah
(Faith & Belief)
Akhlaq
(Morality & Ethics)
Shariah
(Practices & Activities)
IBADAT
(Man to God Worship)
Muamalat
(Man to Man Activities)
Political Activities Economic ActivitiesSocial Activities
Banking & Financial Activities

5. Fulfillment of Financial Needs
Own Capital Others’ Capital
Equity Financing Debt Financing

6. The name bank derives from the Italian
word banco "desk/bench.
In practice, the word “Bank” means an
institution which borrows money from
people and lends money to people for
interest or profit and provided other
financial services.

7.  The body which is promoted by Hiram sources is
bound to hellfire.
 On the Day of Judgment, a person will not be moved
from the place where he stand until he is asked about
the sources of his income and they way he spent it.
 Purifying of the needs of life (food, drink, clothes
house etc) is one of the most important reason for the
acceptance of prayers by Allah.

8.  Accepting money
 Processing of payments by way of
telegraphic transfer, internet banking, or
other means;
 Issuing bank drafts and bank cheques
Lending money
 Providing documentary and standby letter of
credit, guarantees, performance bonds,
securities underwriting commitments and
other forms of off balance sheet exposures
 Safekeeping of documents and other items
in safe deposit boxes

9. Islamic banking has been defined as
banking in consonance with the ethos and
value system of Islam and governed, in
addition to the conventional good
governance and risk management rules by
the principle laid down by Islamic Shariah.

10.  Shariah compliant banking, to enable
Muslims to do their banking transaction
in a Halal way.
 Achieving the goals and objectives of an
Islamic economy.

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“O you who believe. Fear Allah, and give up the
Riba that remains outstanding if you are (in truth)
believer”. (11:278).
“If you do not do so, then be sure of being at
war with Allah and his Messenger.” (11:279)

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What is Riba?
The word “Riba” literally means
excess, increase or addition.
Any amount over & above the principal
payable in a Loan Agreement
recoverable as Contractual Obligation
is Riba.
In the words of Prophet (SAW) “Every
loan that draws interest is Riba”.

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OBJECTIONS ON
ISLAMIC BANKING?

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1.
COMMON MAN OBJECTIONS.

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COMMON MAN OBJECTIONS.
2. ISLAMIC PIG

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COMMON MAN OBJECTIONS.
3.
ISLAMIC BANK = CONVENTIONAL

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4. COMMON MAN OBJECTIONS.

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NO PERFORMANCE IN SOCIETY
5. COMMON MAN OBJECTIONS.

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COMMERICIAL RIBA
Vs
USURY (INTEREST)
6. COMMON MAN OBJECTIONS.

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22. QUESTIONS:
muftiasadgul@gmail.com