OMAR KHALED RUMI

Bai-Muajjal is perfectly a legitimate transaction to the Shari'ah, provided: a)            That the goods desired by the client is first purchased by the bank and ownership of the bank on the goods is established, i.e. the bank must transform its money into goods. b)           That after purchase of goods the risk of the goods is borne by the bank until the possession of the merchandise has been passed on to the client. i.e., "The bank would have to continue to be responsible until the goods were actually delivered to the client, not necessarily by the bank, in accordance with specifications and other terms of the contract." c)            That the specification of goods, delivery date, time and place and other terms of contract are ensured.

Hire purchase under Shirkatul Milk is a legitimate transaction from the Shari'ah point of view subject to taking into consideration the following conditions: (a) That the asset desired by the client is first purchased by the bank and the client jointly. The ownership to the asset shall be as per equity participation of, the bank and the client. Rent will accrue only after delivery of the asset to the lessee in usable condition/good order. (b) That after purchase of the asset the risk of the asset is borne by both the owners, the bank and the client lessee. This is true until such time that the asset is actually delivered to the client lessee in accordance with the other specifications and terms of the contract. (c) That the specifications of the asset, delivery date, time and place and other terms of the contract are ensured. Deviation from any of the above conditions will result in the transaction being one based on interest, which is not Shari'ah approved.

It is not always easy to get the right things near our reach time passes. Civilization may be overthrown. Things change day by day. But sometimes it becomes so hard to reach the destiny.   In case of Islamic Banking the same thing happened. After 1400 years the world started thinking about this very necessary financial system. Though the system of banking is as old as the human civilization it is really a matter of great regret as well as failure for us. In the middle of 20 th century some Islamic scholars of pakistan at first thought of this system. They tried it locally but failed due to lack of proper effort as well as support. In 1963 Ahmed al Naggar started Islamic bank in a pastoral area in Egypt.   A good number of Islamic banks were established there at that time. But the then govt. of Egypt banned all the banks. The effort collapsed at the very outset. In 1975 IDB was established. Then the Dubai Islamic bank was formed as its first initiative. In 1983, The Islam