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Financing to A Party Who Explicitly Performs Non-Shariah Compliant Activities

  1. Shariah Advisory Council, Bank Negara Malaysia

    Resolution:

    The SAC, in its 58th meeting dated 27 April 2006, has resolved that Islamic financial institutions are prohibited from granting financing to companies, bodies or individuals whose activities explicitly involve non-Shariah compliant elements such as gambling, liquor industry and brothel.

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  1. Dallah al-Barakah

    (8/1) Leasing ofproperties for the establishment of markets or restaurants or hotels or tourist facilities that involved prohibited productions or services.

    1. If the leasing of property is meant for purely prohibited purpose, such as to be operated as church, bar or nightclub, the lease contract is then fasid (void), because the subject matter (usufruct) of Ijarah contract is prohibited.
    2. It is prohibited to lease a property for the purpose of selling goods or products which majority of them are impermissible. This is in accordance with the maxim “ li al-ghalib hukm al-kull”. The predominant gets the jurisdiction of the whole )
    3. It is permissible to lease a property to those who intends to sell goods which majority of them are permissible or to those who offers services which majority of its nature are permissible, even though some of impermissible goods or services are involved. Such permissibility is due to consideration that the essential objective of the leasing is permitted in which it involves the trading of majority of permissible goods and services. In this arrangement, the lessee will be liable for the sin of conducting impermissible trading. This kind of leasing application is allowed taking into account of its main elements which are permissible. The main element of each business could be ascertained by the size of business activities.

    Click here to view the arabic versionSource:

Qararat wa Tausiyat Nadawat al-Barakah lil-Iqtisad al-Islami (2010) (p59)