The Interest Usury (Sood or Ribah)

The Interest Usury (Sood or Ribah)

The Holy Quran has strongly condemned the practice of promoting and adopting usury (sood or riba) as a means of amassing unlawful riches. The warning is quite formidable as a deterrent. It is said, "Allah has permitted Trade (commercial deal) and forbidden usury. Those who, after receiving Direction from their Lord, desist, shall be forgiven for the past. Their case is for Allah (to judge). But those who repeat (the offense) are companions of the Fire. They will abide therein for ever. Allah will deprive usury of all Blessing, But will give increase for deeds of charity. For He loveth not creatures (who are) ungrateful and wicked (Surah Baqar(2) : Verse 275-276). The Holy Prophet (SallAllaahu alayHi wa AaliHii Wasallam) has also condemned the dealing with usury in any manner. He said, "The man who accepts usury, who gives usury, one who writes the document on usury and those who stand witnesses to it, are all condemned as accursed." He has also said that though superficially the usury/interest gives increase in the wealth but in consequence and in the longer run it cause diminution/decrease in one's assets. PROBLEM:- Usury in all forms in absolutely haram and one who does not believe in usury being haram is kafir and one who knowingly as such does any sort of dealing involving usury is Fasiq (transgressor) and condemned as a witness. In an agreement of mutual deal between two (party/person) when one side there is excess and on the other there is nothing, then this is usury (Riba/Su'd). PROBLEM:- A thing which is sold by weighing or measure when it is exchanged with a like commodity and if there be an excess (caused deliberately), it is haram. But when this exchange is between two unlike things and the deal is not on weight or measurement, then the increase or decrease is not usury. The thing on which the question of usury is applicable is on the basis of measurement and weight of the like commodities. PROBLEM:- When both the criteria i.e. the like commodities and weight/measure exist at one and the same time then excess or decrease becomes haram as usury known in fiqah terminology as `Riba bil Faz'l'. And if one side is the cash and on the other side is credit (debt), this is also haram (known as Riba bin Nisyah). For example when wheat is exchanged with wheat or with barley, then any excess or decrease is haram. Or when one person gives one thing then and there whereas the other will give his equivalent some time later. This is forbidden. PROBLEM:- The thing about which, the Holy Prophet (Allah's grace and peace be upon him) the excess in measurement has declared haram, it belongs to the category of deal by measurement and the thing in which excess in weight is haram is `deal by weighing'. After this Prophetic declaration, there can be no deviation or variation in the day to day dealings. If the common practice is not in keeping with this pronouncement. However where specific command of the Holy Prophet (Allah's grace and peace be upon him) is not available the commonly accepted procedure can be accepted as valid. PROBLEM:- A thing of weighing categories if exchanged with a measurable commodity should be of equal worth even if there is difference in weight or measure. PROBLEM:- In Shariat the least measure is half s'a. If anything which is less than half s'a can be exchanged with another thing even if there is slight difference in their measure if they belong to the kind of produce. PROBLEM:- Wheat, barley, date palm, salt or any other commodity which should be sold by measure according to practice under Sahariat Laws, if they sold by weight (as is the general practice in the market) this is permissible. PROBLEM:- A fish can be exchanged with where fish is not sold by weight. However if fish is sold by weight then the two lumps of fish should be made equal in weight. PROBLEM:- Fresh dates can be exchanged with dry dates if they are in measure, weighing in this respect in not reliable. This principle applies when dealing fresh fruits with dry fruits. PROBLEM:- Wet wheat grains can be exchanged with dry wheat grains in equal measure provided the wet wheat is dried and then measured. Milk can be sold in exchange of cheese with modification in their measure. PROBLEM:- Wheat grains cannot be exchanged through equal measure with the floor or sattoo or the exchange of sattoo with floor is also not permissible, though if there belong to the same group of grains, even if they may be equal in weight. PROBLEM:- In things where equality is the condition for the deal being valid, it is necessary that the knowledge of equality should be mentioned as the time of agreement of deal. If the deal is conducted without the knowledge of equality it will not be in order even if the commodities have correct proportion. PROBLEM:- The deal of wheat in exchange of wheat was done but the possession on both side did not take place. This is permissible. Commercial deal of grains with its like kind or different kind (of grain) taking possession is not necessary, but this is permissible only when both sides are known to each other. PRECAUTIONS AGAINST USURY. Offering and accepting usury are both Haram in Islam. There is condemnation for both in the Tradition (Ahadees) of the Holy Prophet (Allah's grace and peace be upon him). At the same time it is necessary that we should avoid circumstances whereby we may be forced to give usury/interest. However, if any just and binding necessity where money cannot be obtained except taking loan with usury/interest as a compulsory condition, we must try to find and ways and means whereby we can avoid prying/giving interest as far it is possible. We present certain precautionary measures which would give us some relief from this unavoidable curse, keeping in view that by doing so the lender should also receive some benefits in the form other than plain usury/interest. It will only involve some change in the modalities of transaction which will ensure gains without resorting to unlawful and haram practices. Note: At times there are situations in which there are superficially little or no difference between profit (nafa) and usury (su'd), through a slight change in the method or mode of deal. To illustrate this, we take some example narrated in the Ahadees (Tradition) of the Holy Prophet (Allah's grace and peace be upon him), (1) It is reported that the Holy Prophet (Allah's grace and peace be upon him) sent one companion at the governor of Khyber. He brought some nice dates from Khyber and presented them to the Holy Prophet (Allah's grace and peace be upon him), inquired if all the dates of Khyber are of this nice and high quality. He said in negative and added `We exchange two s'as of ordinary dates with one s'a of these high qualities of dates and for these s'as we take two sa's of these dates. The Holy Prophet (Allah's grace and peace be upon him) forbade doing so. He told him to sell the ordinary dates and with money so received he should purchase quality dates. He said to observe this principle in all deals where exchange/transaction is does through weighing. (2) Once Hazrat Bilal (May Allah be pleased with him) brought some (nice) dates and presented them to the Holy Prophet (Allah's grace and peace be upon him). He asked Hazrat Bilal from where he got the dates. Hazrat Bilal replied `I had some old dates at home exchanged two s'as of old dates with one sa' of fresh dates. The Holy Prophet (Allah's grace and Peace be upon him) replied, "Alas! This is all usury (riba). Do not do so. If you want to buy these fresh dates, First sell our own dates and with amount buy the fresh dates. (Saheehain - Muslim - Bukhari) From these Ahadees it is clear that the intention in each case to get the good quality of dates. It is the mode of dealing that make all the difference. If we exchange old date with fresh dates, it becomes usury/interest (Riba or Su'd) which is forbidden, but if we sell our old date and purchase the fresh dates, it is permissible. Here we present some instances which illustrate avoidance of taking interest; these have been suggested by the scholars of Islam. PROBLEM:- A man had to receive Rs.10/- as loan/debt. He bought a thing worth Rs.10/- from him the debtor, took possession of the thing and after some time he sold the same thing for Rs.12/- at the hands of the same person on promise of payment at a fixed date. This made the man richer by two rupees. This is his profit (which is permissible) and the interest or su'd (which is forbidden). PROBLEM:- A man demands repayment of his loan/debt. Which the latter to is unable to comply, but he sold his something for Rs.100/- to the loan given, who it look possession of the thing. After wards the loan taker bought the same thing at Rs.110/- with the promise of payment after a year. This transaction is valid. PROBLEM:- A loan seeker sells a thing to the money lender for Rs.13/- on the promise of 6 months and gave him the possession, but the latter sells the same thing to a stranger who after doing Iqalah sells the same thing to the loan seeker for Rs.10/- and got the money, with the result that the money seeker gets his thing and the money lender gets Rs.10/-, but at the end the loan seeker becomes a debtor of Rs.13/-. PROBLEM:- There is yet another way to avoid su'd (usury). Suppose a man asks his friend Rs.10/- as loan. He does not lent the money but suggest that he should buy a thing from him for Rs.12/- and sell it for Rs.10/- in the market and thus his needful will be done. The clever man sold that being for Rs.12/- which brought him profit and the deal is also in order from any su'd. THE RIGHTS. The subject matter discussed under this caption are more imaginary than real. The situations mentioned relating parts of residential accommodation/out house/extra structures, passages through the building are non-existent in the modern living. Similarly these will be of real information/knowledge to persons studying Laws of Shariat through the medium of language other than Urdu. BAI-E-SALAM. PROBLEM:- Commercial dealing consist of four phases, (1) on both sides are (2) on both sides are price of thing under deal (3)on one side is and on one side price of thing This is known as (4) when on both sides is price of thing, it is known as . In the 3rd phase where on one side is and on one side is price of thing, there are two sub division namely where the object of deal is necessarily to be present is known exact deal ( ) and where the payment of price of the thing is instant, it is known as In the deal the thing which is to be purchased is a liability against seller and the buyer pays the cost price of the object on the spot and the amount j(rupees) which he hands to the seller is known as and and the other is known as and the price is known as . The part of absolute deals is also in the deal. The presentation of offer and its acceptance are also necessary in the agreement of deal. There are certain conditions in them which must be fulfilled. These are, (1) In the agreement there should be no right of choice (Khayar-e-Shart) neither for both nor for one. (2) In the cost price the nature of currency should be specified. (3) The nature and denomination of currency extant at the place of deal should be mentioned clearly. (4) Description of currency especially of coins, counterfeit as well as real is to be stated. (5) The price/cost of the object of dealing in exact number of and evaluation will be mentioned; merely pointing towards a lump of currency etc will not be enough. If the object of deal is to be paid at different rates/measurement etc, then the nature of cash object, it number (if countable), measure/weight and the total cost against each must be clearly mentioned in the agreement. (6) In the same meeting of agreement the possession of the capital (cost or price of the object) must in to effect in favour of buyer (Muslim Elahe). PROBLEM:- The basis features of perfect deal of sale (Bai-e-Salam) is that the buyer shall become the owner of the price of the object and shall become the possessor of . When this agreement comes into effect and the presents the in time then has to be taken. However, if the thing is against the agreed terms then the will be forced that the thing on which has taken place should be presented. PROBLEM:- can be accepted on the condition that the quality/quantity of the thing in the deal should be clear and definable, whether it is of the measure/weighing or countable in number category. PROBLEM:- To strike a deal in respect of thing which has not been produced is not correct, for example, the fresh crop of wheat unless it is worthy of sale, is not permissible. PROBLEM:- Things which are sold in numbers, (dozen etc) if their size and weight be also mentioned if permissible. PROBLEM:- is not permissible in live stocks (animals), in slave or slave girl, cattle or birds, even in birds of similar, shape or size etc, for example pigeons, dove, and sparrow. PROBLEM:- cannot make any alteration with having paid the cost before and cannot make change in the , for example he cannot enter into deal of any kind what so ever. If gives the as a gift and he accepts it, then it will be taken as an iqalah of the deal and not a gift. In that event the amount will have to be returned. PROBLEM:- To offer anything else other than agreed in the transaction. For example, if the deals refer to the currency of rupees for payment of the cost, to offer Ashrafi or any other currency will not be in order. PROBLEM:- To give any other thing in place of the agreed article of deal or take any other thing is not permissible. However if the offers any better which was agreed in deal then cannot refuse to accept it. And in he offers anything of lower quality, he can refuse it. ISTISNA'A (Making, Manufacturing anything) Sometimes it so happens that a worker or craftsman is asked to make or manufactures a certain thing or things according to desired design, within a given period. If the period is not less than one month, then it is and all conditions which are applicable in such a deal will be observed, without considering any stipulation if this is according to extant culture or fashion. It shall only be seen that the deals conforms to the conditions applicable in such a deal. If there is no fixed time or less than a month then the Istisna will be in order. And thing which is outside custom, fashion as far as Istisna is concerned, then it will not Istisna to be treated as . PROBLEM:- There is difference of opinions among the scholars whether Istisna is a commercial deal or it comes within the purview of promise. The latter (promise) is a thing not existing at the time or order. Some regard as a deal because a definite agreement with all relevant details of a valid deal. The worker or craftsman brings the manufacture good thus presenting the object of deal in fulfillment of the agreement. PROBLEM:- The ordered thing shall become the property of man only when it comes in finished form. The manufacturer can also give the thing to other man for better return. However once he enters in an agreement, he cannot decline to complete it. MISCELLANEOUS PROBLEM OF COMMERCIAL DEALS.  Earthen clay toys making cows, buffaloes, elephant, horse and clay toys meant for children should not be purchased, to do so is not permissible. These toys are also of no value and if someone breaks them, there is no compensation due against him. PROBLEM:- Live animal such as dog, cat, elephant, panther, hawk, eagle, their deal is valid. Hunting animal/birds whether trained or untrained, can be bought and sold. Biting dog is not fit for training and its deal is also not allowed. PROBLEM:- To buy (tame) monkeys for frolics and fun is not allowed and to play with for this purpose is also haram. PROBLEM:- To keep dog and tame it to protect domestic animals, agriculture field watch and guarding the house and inmates and for hunting purposes is permissible. To keep dog for purpose other than these is not permissible. Even for these purposes dog should not be kept inside the house except where thieves/robbers are to be warned. PROBLEM:- All sea/water creatures except fish cannot be used for commercial deal, they include frogs, crabs etc insects living in earth holes, rats, musk-rats, lizard, chameleon, scorpion, ants their deal is not valid. PROBLEM:- Non-believers including Zimmis have to follow Islamic Laws in respect of commercial deal. However if they deal in wine (liqueur) and flesh of swine, the Muslims authorities will not object provided they do not do so openly and freely. PROBLEM:- If an non-believer buys the Holy Quran or any other Holy Islamic Books he shall be persuaded to make them over to a Muslim on payment of the price. PROBLEM:- A man buys a thing but does not take its possession nor pays the price and disappears, but is known to be residing at a certain place. It is not open for the Qazi to sell the thing and received the price. If however his address is not known and if he later proves his deal on the strength of witnesses, then the Qazi or his assistant can sell the thing and pay its price (to the seller). PROBLEM:- The widow pays for the coffin shroud of her deceased husband or some from his survivors pays for the shroud. If the shroud is of the required quality, the buyer can take the amount from the inheritance of the deceased. However if someone else pays for the coffin (and other funeral expenses) he will not receive from the inheritance. It will be an act of pretty and virtue of new era from the Divine. PROBLEM:- Someone earns money through haram means or takes the money by force and purchase something. Now there are certain factors involved (1) He paid the same amount as price (2) taking this haram money in view he purchases the thing and pays the price from this money (3) bought the thing from unlawful amount but pays other money (4) without fixing the money in mind he simply order to give the thing from this amount (5) bought from the unlawful money but paid other money (i.e. not unlawful). In the first condition the deal is not halal for the buyer and the profit from is also unlawful. In the other three conditions the deal is valid or halal. Warning: What thing becomes unlawful (faisd) in account of pre conditions and what does not make it so and on what things can kept suspended upon condition or otherwise depends upon the following principles or formula. What a thing is exchanged with another thing, it shall become unlawful/faulty with a faulty condition as a deal becomes unlawful what faulty or defective or improper conditions are brought to bear upon it. And the thing is not to be exchanged with another material thing, the deal shall not be impermissible on account of improper condition placed on it whether the material thing it to be exchanged with a non-material thing/object (e.g. Nikah, Talaq (divorce) and Khula in exchange of money), or if they pertain to deeds of virtue (eg. gift, will). In those affairs the imperfect conditions themselves become in applicable, or the debt if it is end in a shape of exchange (which is normally is not the situation) but since its motive in the beginning is on a note of virtue, the imperfect condition will not make it imperfect or unlawful. The other principle is that the thing or affair in which the primary condition is securing possession (Tamleek) or making it binding (Taq'eed to imprison) they cannot be made subject to conditions. For example in respect of having possession (Tamleek) we can quote the incidents of business deal hiba (gift) monopoly, Nikah, consent or confession (Iqrar). In respect of Taqeed (to exercise option) in respect of some existing agreement, in this respect the right of a husband to resume matrimonial, in the light of Quranic permission, with the wife whom he has given Talaq-e-Rajee, To cancel agreement with a court advocate (with a view to appoint another one in his place), to with hold or withdraw privileges and concessions due a (bought) slave, (other postulates are purely presumptive or dialectical, hence skipped over). Further example of imposition of faulty conditions which the business deal null and void. Making condition for fulfillment of agree. A man under debt if he imposes condition that he will pay the debt. This conditional willingness is not valid. Agreeing on oath as a condition to do a certain job is not binding. Tahkeen conditional for emulation of group of persons to decide a issue in not valid. There are certain things/affairs which in spite of faulty condition remain intact. There are (1) debt (loan) (2)presents or gifts (3) Nikah (4) Talaq (divorce) (5) Khula (divorce through wife) (6) charity (sadaqah) (7) (8) pledge, pawn (9) (10) Will (wasiyat) (11) partnership (12) (13) (14) riches ( ) (15) (16) (17) (18) (19) (20)permitting slave to trade and many others. BAI-E-SARF (Deal or exchange of price in one currency with price in other currency. The word `Sarf' specifically in transaction deals for price, cost, wages or return of labour, while the term `Bai-e-Sarf' stand for a deal in which the price is sold (exchanged) with a price, in other words, the exchange or deal of a thing with a like thing in relation to currency (as a cash) with another currency (in commodity), for example, buying silver or silver coins of smaller denominations or buying gold with guinea (ashrafi). Sometimes it is the exchange takes place with an unlike commodity for example, to buy gold or guinea with rupee. PROBLEM:- The word saman (price, cost etc) stands in the common sense the thing with the help of which things can be purchased and it is used for this very purposed and meant for the specific purpose. It may be a natural prof produced (gold, silver, minerals etc) or designed by man (gold guinea, jewels etc). The other kind of saman brought in the market as exchange units. If we call the first category as natural or created (Khalqi) the other kind of saman is artificial or in allegorical sense as human designed (or Ghair Kahlqi) eg. paper currency, small change coins. PROBLEM:- When a silver is exchanged with silver or gold is exchanged with gold (in both cases the medium of exchanges is like commodity), it is necessary that they should be of equal weight and the deal should be conducted in the same sitting with the possession being given to each party of deal. PROBLEM:- In the deal of mixed commodities of like nature there cannot be a choice of selection. It means that permissible that in the event of mixed deal containing lumps of genuine and counterfeit ones, all the genuine article be placed at one side though in small quantity and equated with the counterfeit articles on the other side in a larger quantity. (The genuine and the counterfeit cannot be equated irrespective of the quantities offered in exchange.) PROBLEM:- In a deal involving commodities of different nature and quality their weighing is not necessary, because weighing is necessary only when equality of thing in weight is the criterion. But in such a deal it is essential that the possession of commodities (articles of deal) id given to both the parties in the same sitting, if the sitting is dispersed before the possession, the deal will become invalid. PROBLEM:- Bai-e-Sarf (exchange of price in one currency with price in other currency) is not valid through promise or through correspondence as in both the cases the possession of the respective parties is not possible in the same sitting. PROBLEM:- If the Bai-e-Sarf correctly takes place then the exchange mediums on both side can remain undetermined in terms of nature and quality, for example, a rupee can be exchanged with any other rupee provided it is genuine, the presentation and acceptance this can take place as a valid deal. PROBLEM:- IF the deal of Bai-e-Sarf the imposition of Kharar-e-Shart (right of choice) renders it nul and void. Similarly, if from any side the time for payment is proposed (as against on the spot) the deal does not remain intact. However, if in that very sitting, the right of option (Khayar-e-Shart) and time for payment are withdrawn, the agreement of deal will become valid. PROBLEM:- If in the deal of gold - silver any side proposes payment on credit, the deal becomes faulty. Unless the person desiring payment on credit pays the full amount before dispersing. PROBLEM:- In making purchase of nay thing of gold and silver, the buyer has the right of finding fault (khayar-e-Aib) and the right of examining its quality (Khayar-e-rujat). There is no khayar-e-rujat in the deal of rupee - gold guinea, but there is khayar-e-aib. PROBLEM:- Unless the buyer takes the possession of the thing, he cannot make any use of that thing. If he gives the thing as a gift or sadagah or forgives the entire cost and the other person accepts it, then the Bai-e-Sarf becomes invalid. PROBLEM:- The silver which is used in the sword as an alloy should be less in cost than the silver to be paid as a price of that sword. The relative cost of both (the silver in the sword and the one to be paid as price) should be carefully examined to make the deal valid and avoiding as a deal of unlawful gain or su'd. PROBLEM:- If there is dirt in gold and silver and the metal as such is dominant, then the thing will be assumed as of gold or silver, and if they are sue as medium of payment for any object of gold and silver, then the balance on both sides should be equal in weight. Also in the matter of debt/loan their weight will be the criterion. PROBLEM:- When alloy in the gold and silver is dominant, then it cannot treated at par with the real gold and silver. If this alloy is uses a medium of price of a thing made of gold/silver then the quantity of gold/silver should be made equal to that in the alloy. Otherwise the bai-e-sarf will not be valid. PROBLEM:- The rupee coins in which the element of alloy is dominant, their use in the matter of deal and debt/loan is permissible as by weighing or counting numbers. If the system is that of weighing the by that method (weighing) and it the system through counting (in number) then it should be employed. BAI-E-TALJIAH (FEIGNED OR DECEPTIVE DEAL). PROBLEM:- When a man wants to undertake a deal with some person, but fears that if his plan is out some other (whom he knows)will snatch away the thing by force which he cannot resist. He will arrange a feigned deal with the buyer, but in reality it will be just a show. HE will also arrange witnesses to this effect. For Bai-e-Taljiah it is necessary that they must speak out his mind before other persons, merely thinking in wanting the deal will not be complete, although Taljiah is at heart only a joke, a buffoonery. PROBLEM:- By implication `Taljiah' deal is a `suspended' deal. It can be turned into a real deal id the parties concerned so desire. If they refuse it, the deal will stand rejected or cancelled, when such an situations is part of the agreement. In the event of the deal being Taljiah or otherwise, the matter shall be resolved by producing evidence on either side. BAI-UL-WAFA (DEAL OF COMPROMISE). This also known as BAI-UL-AMANAT, (deal of Trust), BAI-UL-ITA'AT (deal of Fealty) and BAI-UL-MU'AMLA (deal of Mutual Affair). The basic or fundamental understanding between the buyer and the seller in this deal is that when the seller returns the price of the thing (in deal) to the buyer he will return the thing to the seller. This may also be used in taking and returning the debt/loan within the stipulated time. PROBLEM:- Bai-ul-Wafa is in essence a kind of ;ledge or pawning a thing on certain conditions. The thing is pledged by way of deal so that it may be used as a commercial enterprise to earn profit, which will be equally distributed between the pledger and the pledge. If the thing pledged is lost or destroyed, then the amount due against the pledger will also lapse provided the due is equal to the amount of debt. PROBLEM:- The affairs involved in the Bai-ul-Wafa are of complex nature as also opinions of the scholars are of varied nature. MUZA'RABAT This is in a sense a partnership in a business or commercial transaction. In this partnership on one side is the finance (capital) and on the other side is the labour or skill to undertake agree business. The person who supplies the finance is called the (investor) and the one who undertakes the work of running of business through manual and skilled labour is called `Muzarab' ( ), and the finance supplied by the owner is known as or capital. If according to agreement the whole of the profit is to be given to the owner/capitalist, the process is known as and if the entire earning is to be given to the worker, then it would be (loan). In the modern business, the association of capital and labour has become the necessity. Neither the capitalist nor the labour/worker handles the growing business enterprise on his own. The worker needs financial assistance to earn his livelihood by engaging himself is some skill cum- manual pursuits. The capital too cannot increase by remaining idle at home or in the bank. The institution of Muzarabat in the ever growing commercial transaction is thus of great help and profit to both the partners in Muzarabat deal. PROBLEM:- There are some conditions in the Muzarabat. (1) The capital should be in the form of price i.e. money or exchangeable currency, but not of the nature of assets or the articles as such. However articles can be sold and with the price so received the process of Muzarabat can be undertaken. (2) The capital should be present and noticeable. In the event of difference in the quantum of capital at the time of distribution of profit the matter should be resolved through the process of witnesses and evidence. (3) The capital should be an absolute reality as such, duly calculated and computed, known as hard cash, not in the form of loan or document of loan/debt. PROBLEM:- By selling anything and with the amount so received as its price and utilizing the amount as capital or part of capital is permissible. The amount kept as trust with any one or the amount forcibly taken by some can be utilized as Muzarabah by agreeing to divide the profit 50-50 is also permissible. (4) The enticement of capital (to be utilized in Muzarabah) should be made over to the worker and the latter should have complete possession and control on the capital, free from all interference by the capital owner. (5) The profit should be divided according to agreed formula, 50 - 50, 1/3 - 2/3, 1/4 - 3/4. The ratio of the profit should be definite and not subject to any kind of provision. (6) The share of each one should be known and specific and free from all ambiguities likely to crop up now a afterwards. (7) The giving of profit to the worker should be binding on the person investing capital in the Muzarabah. If the profit is partly given from the capital or party from capital and partly from the profit, then the Muzarabah will be nul and void. PROBLEM:- The Muzarabah implies that when the capital is handed over to the worker (Muzarib) his position becomes that of a trustee (Ameen), and when he starts working be assumes the role of a vakil (guardian of interest) for both side and when earning /profit becomes the partner (shareek). PROBLEM:- The loss in the Muzaraba is the liability of the capital supplier (Rab-bul-M'al). However, if is desired that the loss should be borne by the worker and not by the financer, then they will have to the procedure as under. The financer should treat the amount as loan to the worker and add to it one rupee as a token of partnership Now both will work together and will share equal profit. If the loss occurs the loss will be of the worker who after taking the entire capital as loan becomes the finance owner. The loss of real financer will be only one. Now he can receive the debt which has become due against the pseudo financer, i.e. worker. PROBLEM:- If Muzarabat becomes nul a void. It is converted to monopoly which means that the worker (as a partner) will not get the share in the profit, but he will receive the wages proportionate to his labour, whether or not there is a profit in the enterprise. However the amount of his wages shall not exceed the profit that he would get if the muzarabah had continued. PROBLEM:- In the event of the Muzarabah but inoperative, the sum of money that remains with the worker, is like a trust (amanat) with him. If some loss occurs, then as an ameen (trustee) the compensation will not lie with him, in the same way as in the regular and valid Muzarabah there is no question of compensation for any loss. The worker gives an amount to someone and receives the entire profit to himself (as the owner of the capital), Here too the capital is an trust with him and as such if any loss occurs there is no compensation or guarantee payable. PROBLEM:- The worker will not undertake a work which involves physical injury nor engage himself in a work which the business men as a practice do not undertake, nor allow time limit to others which the businessmen do not deal. If there is a partnership of two worker to work jointly, then one of them alone cannot do any business of buying, selling unless he gets approval from his colleague. PROBLEM:- In the event of an irregular or faulty deal anything purchase becomes the property of the buyer, this is not an act of opposition and deal will still be called Muzarabah. If however the thing is purchased with deliberate intention of fraud or usurpation (Ghaban-e-Fahish), then it will an act of (clear) opposition, and this thing will be the property of the worker even if the owner (supplying finance) allows the worker to use his discretion. If now the worker sells the article with intention of deliberate fraud, his act will not be deemed or opposition. PROBLEM:- If the capital supplier (finance) imposes conditions upon the worker (the other partner of Muzarabah) in respect of the city (place), time or the nature of business, then it becomes binding on the worker to abide by it. Further, if the financer restricts deal to some definite person as seller or buyer, the worker cannot defy it. Although he did not mention these restrictions at the time of agreement or handing over the amount to the worker or added then afterwards. PROBLEM:- The worker enters into an agreement with person with whom his evidence is not reliable, for example, his father, his son, or his wife. If the deal in such as case is of a moderate nature, it is permissible, otherwise not. PROBLEM:- In the event of death of any of the two partner the Muzarabah becomes in operative as also when any one becomes mad. If the article are in the shape of business, and if the worker dies then the exactor of his (wasi) can sell the entire lot of articles. If the owner (financer) dies and the commodity of deal is in the shape of cash amount, then the worker cannot interfere and if the deal is of physical nature, he cannot take it in his travel (outside). He can however sell it locally. PROBLEM:- If the worker dies and it is not known where the articles of deal are, then the article in his possession prior to his death will be deemed as debt/loan against the deceased and it shall be recovered from his inheritance. PROBLEM:- The worker dies and there is debt outstanding against him, but the articles of Muzarabah are known and as such the creditors cannot claim repayment of their debt. The capital and the profit will go to the financer. The creditors can get repayment of debts from the share of the profit due to the deceased worker. PROBLEM:- In the deal of Muzarabah the loss and or destruction in the capital is adjusted towards the profit of the Muzarah. There is no consideration of loss in the Muzarabah. For example, the capital of Rs.100/- (on earlier time, this was considered an assets/capital. Time has much changed since! Translator) if the profits is Rs.20/- and the loss Rs.10/- then this loss will be adjusted (recovered) Towards the profit and the net profit shall be deemed as only Rs.10/-. However if the loss is so much which the profit cannot fulfill, IN this case the loss will be taken as in the capital. Half of the loss (50-50) cannot be recovered from the worker, because he is the Ameen (trustee) and there is no compensation against the ameen, even if the loss has occurred from the worker. If however the worker does something deliberately which causes loss, then the loss shall be recovered from him because his action was not authorized in the agreement. PROBLEM:- The process of distribution of Dividend/Profit will take place after returning the capital of the financer of the Muzarabah. To distributor of profit before returning the capital in full to the owner will be invalid and unjust. Supposing the capital is lost, then the shortage shall be compensated by withdrawing the amount from the profit to complete the amount of capital invested in the Mozarabah. The remainder of the profit should then be distributed. PROBLEM:- In case of dispute between the owner (financer) and the worker in respect of quantum of profit fixed/unfixed in the agreement the issue shall be decided by the Qazi (court of Islamic Jurisprudence) on the strength of the witnesses from both the sides. However weight age should be given to the owner of the capital when the dispute specifically relates to capital employed and utilized in the Muzarabah, without the capital/finance the Muzarabah as such has no "locus standi". PROBLEM:- The guardian/executer of the will on behalf the minor inheritor takes and utilize the amount by way of Muzarabah. This step is held valid by the Ulema who would like to add one more stipulation in that the world take only that much profit as he would have given to other person. PROBLEM:- The worker buys something from the capital of the Muzarabah, but he is not inclined to sell the thing right now. This he would do when greater profit is coming forth. But the owner insists to sell the thing if on a small profit. The worker will have to comply with the owner plea, However if the worker pleads that a later date he will return the capital along with a larger sum of profit. The owner, in that case, would be compelled to do as the worker proposes. Copied from:  http://www.alahazrat.net/islam/the-interest-usury-(sood-or-ribah)-qanoon-e-shariat.php