The Art of Islamic Banking and Finance: Tools and Techniques for Community-Based Banking

17:35 Give full measure when ye measure, and weigh with a

balance that is straight: that is the most fitting and the most advan-

tageous in the final determination.

83:1–6 Woe to those that deal in fraud —Those who, when

they have to receive by measure from men, exact full measure

—But when they have to give by measure or weight to men, give

less than due. —Do they not think that they will be called to ac-

count? —On a Mighty Day, A Day when (all) mankind will stand

before the Lord of the Worlds?

Professor Elgamal^41 concludes that the meaning of gharar is concep-
tually ‘‘trading in risk, which cannot be defined.’’ Examples are naked
options, financial futures, and derivatives that are not backed by a tangi-
ble and verifiable asset. Examples are the sale of the catch of a fisherman
before he goes fishing, or of a calf before it is born. In conclusion, the
Judeo-Christian-Islamic Law Shari’aa in business transactions prohibits
both riba and gharar. The RF system advocated in this book should be in
fact labeled a riba- and gharar-free system, but we use the term RF for
short. The prohibition of riba in fact implies that the transaction must
also be gharar-free.

NOTES

1. (pp) stands for ‘‘May God’s Prayers and Peace be showered onto them.’’ In Ara-
   bic: ‘‘Sallaa Allahu Alayhi Wa Sallam – usually abbreviated as ‘s.’’’ This is a
   standard idiom that is uttered by all Muslims after the mentioning or hearing
   any of God’s prophets’ names mentioned.


2. Translations of the Qur’aan were obtained from http://www.Islamicity.com and is
   from two sources: (1) The Meaning of the Holy Qur’aan by Abdullah Yusuf
   Ali, Amana Publication, Beltsville, MD, USA and (2) The Qur’an, a translation
   by Muhammad Asad, Andalus Press, Gibraltar 1980. Islamicity Web site:
   http://www.islamicity.com is acknowledged for its indexing and search engines of the
   Qur’aan in different forms, most important of which is the phonetic search engine.
   3.Sunnahis an Arabic word for the style, way of life, and tradition of the Prophet
   (pp).


3. Michael Hart:The 100, New York, 1978.
   5.Hadeethis an Arabic word meaning the documented body of sayings of Prophet
   Muhammad (pp).
   6.Seerahis an Arabic word that means the documented full life story and autobi-
   ography of Prophet Muhammad (pp).


4. The Qur’aan, 2:136.


5. Mr. R. St John, Esq: Private communication.

44 THE ART OF ISLAMIC BANKING AND FINANCE