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Make Yourself. Shariah -Compliant. Why is Shariah-Compliance Important?    . Our lifelong objective is to seek the pleasure of Creator ‘Islam’ is a complete ‘way of life’ – What does this Mean? The Muslim Code of Life – stipulated from Quran and Sunnah More than just Ibadah!

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Make Yourself


Why is Shariah-Compliance


  • Our lifelong objective is to seek the pleasure of Creator

  • ‘Islam’ is a complete ‘way of life’ – What does this Mean?

  • The Muslim Code of Life – stipulated from Quran and Sunnah

  • More than just Ibadah!

  • Widespread ignorance of Mu’amalat matters 

Three Basic principles of Shariah-Compliance    

  • The subject matter of any transaction must be Shariah-compliant

  • The transaction must not involve any interest based lending or borrowing

  • Contemporary contracts fall foul of Shariah Principles in FOUR key areas

Basic principles of Shariah-Compliance

Contracts - Four Key Issues

Penalty clauses which require the householder to pay interest charges if they default on payment

Seller not having possession/ ownership of goods or selling something that is not in existence yet – e.g. financial markets such as derivatives and options and short selling

Contracts must be devoid of excessive uncertainty (gharar)

Contracts must not be interlinked so as to form a contract

within a contract

Mortgage Alternatives

(Islamic Home Purchase Plans)

  • Why are conventional mortgages not permitted?

  • How do Islamic Home Purchase Plans differ?

  • Who provides Islamic Home Purchase Plans?


    • Type of Shirkah (aqd / amwal etc.)

    • Contract within a contract

    • Rental rate being similar to interest rate

    • Spirit vs Letter of Shariah

 Islamic Bank Accounts

  • Why are conventional bank accounts not permitted?

  • How do Islamic bank accounts differ?

    • Diminishing Musharaka ?

  • So who provides Islamic bank accounts?


  • Centrality of constructive possession

  • Spirit vs Letter of Shariah

Investments, Pensions &

Child Trust Funds (CTF)  

  •  What’s WRONG with conventional investments?

  • So how do Shariah-Compliant investments work?

  • Who provides Islamic Investments?


  • Rationale behind 5% and 33%

Personal Loans

  • What is WRONG with a conventional personal loan?

  • How does an Islamic loan work?

    • What is Tawaruk and how does it work?


    • Why is it controversial? Is there an alternative?

    • Also need to consider if the underlying need for the loan is valid

Car & Equipment Leases

  • Are normal leases haraam?

  • Responsibilities of lessor & lessee

  • Penalties on default

  • Interlinked contracts    


  • Differentiating behind a Faasid condition and a void contract

  • Where does bending the rules differ from breaking the

  • rules?

Insurance & Takaful

  • So what’s WRONG with conventional insurance?

  • So how does Islamic insurance work?

    • Takaful ?

  • What about those scholars who view conventional insurance as permitted?


  • How to resolve key issue of Gharar?

  • Aqd Tabarru and debate around this

Guarantees, Warranties &

Credit Cards

  • Are warranties considered to be insurance? 

  • Are conventional credit cards acceptable?

  • Some key challenges:

  • What is the difference between a guarantee, a warranty

  • and insurance?

  • Is breakdown cover insurance, a guarantee or a warranty?

  • Is there a difference between pre-paid cards / debit cards and credit cards?


  • Zakah and Islamic Wills to be covered via dedicated session

  • Each of the areas could easily have it's own dedicated session

  • Each of above areas is a challenge British Muslims have to overcome if we want to submit to Shariah with regards to financial and legal matters

  • Widespread ignorance is prevalent not only amongst Muslim community but also amongst Scholars on these matters

Key outcomes of this session are to:

  • Raise awareness of some of the key legal / financial areas where Muslims need to be aware of Shariah principles to either avoid a clear haram or to fulfill a Fardh Ain obligation

  • To suggest ways for further study as this session is simply to raise awareness and each area needs more research

  • Most importantly for you, the audience to recognise that disseminating and implementing this knowledge amongst the community is a personal challenge!