Posts from — February 2012

Hit a major problem this past few days. My 8 months old required phone HTC Incredible S was unable to charged even I’ve tried multiple USB cables and wall chargers. I assumed my battery was dead after 8 months hard usage and made a decision to buy a new battery this evening. Unable to find one in Kuantan(most handphone shops only selling Nokia’s and some Sony Ericson’s  batteries). Didn’t surprise by that fact coz I’ve tried to buy a nicro USB charger for my phone before and couldn’t find any in my area. Which again is not surprising because I’ve made a simple conclusion that Kuantan is still a low tech area when it comes to smart phone. I even taught  the ‘pakcik’ selling me my phone how to use wi-fi hotspot function on Android phones.

Being a good customer I googled on how to troubleshoot the problem and browse the HTC site for an answer but had no luck. Sent an email to HTC about the problem and it was fast and smooth process. Only after I sent the email I found out that online tech support was still available and I tried it.

It was a pleasant experience and the tech support in-charge was able to assist me in just a few minutes. She even assisted me on my other issue with the phone which I couldn’t connect it to a PC. It is not resolve yet, but I’m trying to follow he instructions and see if it is going to work. Keep on the good job and I’ll buy a HTC anytime when I need to upgrade to a new phone.

The only problem I had was the tech support seems have no idea what was the root of my problems. Is HTC really don’t have any idea what cause the problems or they just hid it from customers is a question I would like to be answered. Other than that I think the customer support have done a good job assisting me with my problems and I really like that when I use a product or service. That’s why I’m sticking with DiGi for more than 10 years even everybody knows DiGi have the lowest 3G coverage area. I’m not living in a rural area anyhow.

Below is the conversation I had with HTC Tech Support. Hope you’ll find it useful. Esp. for someone using HTC smartphone and encounter the same problem I had.

p/s: be nice to a customer support and they’ll try their best to help you too. When they couldn’t help it usually because of the company policy, take your anger to the management and not them.

Continuing on the last post, I forgot to put the part which where Islamic Fiqh Council put out a fatwa that why trading FOREX is HARAM.

Firstly: It involves obvious riba, which is represented by the addition to the amount of the loan which is called “paying fees for delaying the deal”. This is a kind of haraam riba. Allaah says (interpretation of the meaning

Secondly: The agent stipulates that the customer must deal through him, which leads to combining both giving a loan for something in return and paying commission, which is akin to combining giving a loan and selling at the same time, which is forbidden in sharee’ah because the Messenger (peace and blessings of Allaah be upon him) said: “It is not permissible to give a loan and sell at the same time…” The hadeeth was narrated by Abu Dawood (3/384) and al-Tirmidhi (3/526), who said it is a hasan saheeh hadeeth. In this case he has benefited from his loan, and the fuqaha’ are unanimously agreed that every loan that brings a benefit is haraam riba.

Thirdly: Dealings that are done in this manner in the global markets usually involve many contracts that are haraam according to sharee’ah, such as:

1-    Dealing in bonds, which comes under the heading of riba which is haraam. This was stated in a resolution of the Islamic Fiqh Council in Jeddah, no. 60, in its sixth session.

2-    Dealing indiscriminately in company shares. The fourth statement of the Islamic Fiqh Council of the Muslim World League in its fourteenth session in 1415 AH stated that it is haraam to deal in the shares of companies whose main purposes are haraam, or some of their dealings involve riba.

3-    Selling currencies is usually done without the hand to hand exchange which makes them permissible according to sharee’ah.

4-    Dealing in options and futures. A resolution of the Islamic Fiqh Council in Jeddah no. (63), in its sixth session, stated that options are not permissible according to sharee’ah, because the object of dealing in these contracts is not money or services or a financial obligation which it is permissible to exchange. The same applies to futures and trading in indexes.

5-    In some cases the agent is selling something that he does not possess, and selling what one does not possess is forbidden in sharee’ah.

Fourthly: This transaction involves economic harm to the parties involved, especially the customer (investor), and to the economy of the society in general, because it is based on borrowing to excess and taking risks. Such matters usually involve cheating, misleading people, rumours, hoarding, artificial inflation of prices and rapid and strong fluctuation of prices, with the aim of getting rich quickly and acquiring the savings of others in unlawful ways. Hence it comes under the heading of consuming people’s wealth unlawfully, in addition to diverting wealth in society from real, fruitful economic activity to this type of risk that has no economic advantage, and it may lead to severe economic turmoil that will cause great loss and harm in society.

The Council advises financial institutions to follow the ways of finance that are prescribed in sharee’ah and that do not involve riba and the like, and do not have harmful economic effects on their customers or on the economy in general, like shar’i partnerships and the like. And Allaah is the Source of strength.

So which is true? Is it Haram or not?

To really answer the question I would like to suggest further reading of history of banking, insurance and currency trading. If we take a look on modern day banking system and Islamic banking system, we(Muslims) are so late implementing the system, westerners have a huge lead against us before we even start a modern Islamic banking system by ourselves. Modern Islamic banking system only emerge around 1950′s while capitalist  banking system was born hundreds of years before. But now Islamic banking system is gaining  popularity because the system works and our ‘big brother’ system is failing.

Same goes to insurance industry. Takaful System only born in 1970′s, late again a few hundred years after our ‘big brother’ the INSURANCE. Are we going to wait a few hundred years again to create our own system for currency trading(or any other trade exchange system)?

Where is Malaysia in all this?

Tabung Haji is the first to lead us in Islamic banking in 1963. First true commercial Islamic Bank was established in 1983. And Takaful just one year behind. Further reading on the topics I found out that Islamic Insurance(Takaful) System took a few years before most of us Muslims agreed on the issue.

• Fatwa issued by Higher Council of Saudi arabia in 1397 AH (1976 CE) in favor of Islamic model
• Fatwa issued by the Fiqh Council of Muslim World League in 1398 AH in favor of Islamic insurance
• Fatwa issued by the Fiqh Council of the Organization of the Islamic Conference in 1405 AH in favor of insurance under Islamic model
• The Grand Counsel of Islamic Scholars in Mekkah, Maja Al-Fiqh, approved the Takaful system in 1985 as the correct alternative

I am hoping the same thing goes on trading exchange markets. It might take a while (maybe not even in my lifetime) most of us agreed that it is not unlawful to trade on exchange markets. From what I see the system is there and only minor changes needed to make it compliant with Shari’a law. There will always be riba, gharar and maysir in the financial system and our daily life. Leave that to others and we could create our own rule of trading ourselves. When the others sees the beautiful side of implementing sharia law on commerce, they will follow. Just like what is happening now with banking and insurance world.

There is no need to create a big fuss on the topic and sending judgements to those who are in the system. We need to take control of the system before the system fails, not after.

Further read:

http://www.turntoislam.com/forum/showthread.php?t=55800

http://www.islamqa.com/en/ref/106094/forex

http://en.wikipedia.org/wiki/History_of_banking

http://en.wikipedia.org/wiki/Islamic_banking

http://en.wikipedia.org/wiki/History_of_insurance

http://en.wikipedia.org/wiki/Takaful

p/s: Do read on references on further read’s webpages. It added more depth on the kowledge. Just too many for me to list here. And owhh.. I did find an article on trading FOREX is harus published in 2004. But can’t find it again to quote it.

I’m writing this post mainly because of what went out on the news last night on FOREX trading. It was official that Malaysia’s Fatwa Council have declared FOREX trading is HARAM.

I’ve been trading FOREX for more than six years now and when the news broke I was sure surprised and questioning if what I’m doing for these years is HARAM.

I was to tired to start doing a research right away on this issue after spending half day on the road commuting Kuantan – Batu Pahat – Kuantan so I took a nap when I reached home and starts digging for facts surrounding the issue and I found some.

What bothered me most was there was no explanation or whatsoever on the ruling and I’m being me decided to take my own action searching for the truth. While me myself don’t have a degree or any certification in business nor any field of Islamic studies, so do treat this post as an opinion not a ruling. I do however have a passion in business related field both conventional and Islamic. It is lovely if I could find someone who is an expert in the field and having a debate or friendly conversation on the topic. I wish I could have the chance but I’m lucky to find the next best thing, a paper written on Islamic Economic Studies TOWARDS AN OBJECTIVE MEASURE OF GHARAR IN EXCHANGE by SAMI AL-SUWAILEM

This paper develops a framework for analyzing gharar based on economic aspects of game theory. The framework is consistent with Shari’ah maxims as well as individual gharar transactions widely studied in classical fiqh resources. In addition, the framework brings insights into explaining different fiqhi positions on controversial gharar contracts. When extended to contemporary practices, the measure helps understanding the logic of instrument design, and where violation of Islamic rules exactly lies. The moral, ethical, and social aspects of this framework show the deep consistency between Islamic rules of exchange and general Islamic principles of human behavior.

Straight to the topic shall we?

While the exact reason of the ruling is unknown to me at this time, I suspect the elements of Gharar and Maysir are some of the reason why it was decided that trading FOREX is haram. Both of the terms definition in financial

Finance

uncertainty prohibited in Islamic business dealings

in Islamic financing, excessive uncertainty in a business transaction of any type. It is one of three prohibitions in Islamic law.

maysir

Finance

gambling or speculation prohibited by Islamic law

in Islamic financing, gambling with the intention of making an easy profit. It is one of three prohibitions in Islamic law, which is extended to such financial practices as speculation, insurance, futures, and options

The precise meaning of Gharar is itself uncertain. As with riba, fiqh scholars have been unable to define the exact scope of gharar. These claims might well be exaggerating, but they point to the need for further contemporary formulation of the subject.

Ibn al-Qayyim writes: “Gharar is the possibility of existence and non-existence. Its sale is forbidden because it is a sort of gambling, which is maysir. Allah forbade it because of eating other’s wealth for nothing, and this is injustice that Allah has forbidden. It becomes gambling when one party gets a reward (benefit) while the other might not get it, so this becomes illegal.

It should be emphasized that Islam does not prohibit a contract just because it involves risk. Only when risk is a channel to make one party profits at the expense of the other that it becomes gharar. Ibn Taymiah makes this clear: “It is well known that Allah and his Messenger did not prohibit every kind of risk. Nor all kinds of transactions that involve the possibility of gain or loss or neutrality are prohibited. What is prohibited among such kinds is eating wealth for nothing, even if there were no risk, not that risk as such is prohibited.”

If risk is not the reason for prohibiting gharar, why is it that the Prophet mentions the word gharar? The reason is that no rational person would accept to engage into a game in which he will certainly lose. He does so only if it is not known a priori who will win and who will lose. Given the possibility of gain, each party hopes that he will be the winner, and that what makes it gharar. This statement makes it clear that, although risk as such is undesirable, the reason gharar is prohibited is that it involves eating wealth of others for nothing not mere risk.

The topic is discussed thoroughly in the paper. You could download the pdf here or read it on irti.org. I’m just here to express my opinion based on what I found, my knowledge and experience that instead of making a fatwa that trading FOREX or any exchange market is HARAM the council should encourage more Muslims taking part in exchange market, create trading rules based on Sharia’s law and train Muslim traders to use modern analytical tools and trade within Sharia’s law of commerce to eliminate the prohibited elements(Maysir and Gharar) in the market. If Islamic Finance market could prove to the world that without those elements the world economy will become more stable the rest of the world will follow.

p/s: The paper TOWARDS AN OBJECTIVE MEASURE OF GHARAR IN EXCHANGE by SAMI AL-SUWAILEM does requires some level of knowledge on game theory, exchange markets and Sharia law on business. Nothing that you couldn’t Google. YES, there are all 3 prohibited elements in today’s exchange market as well as FOREX. But you could opt-out and trade based on Sharia law if you want to. WITH KNOWLEDGE.