ISB540 - INTRODUCTION by MuhyiddinKhalid

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									ISLAMIC BUSINESS TRANSACTION



                               
                       INTRODUCTION TO ISB540




           MAHYUDDIN KHALID           emkay@salam.uitm.edu.my
               COURSE BACKGROUND

Course code    :   ISB540
Course name    :   Islamic Business Transactions

Level          :   Degree

Credit hour    :   3

Contact hour   :   4

Part           :   4

Status         :   Elective

Prerequest     :   None




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                               OBJECTIVE
 Upon completion of this subject, the student should be able:-
  1. Know in depth the types of business transactions and property
     management
  2. Examine fiqh muamalat in contemporary Islamic business
     transactions
  3. Practice the instruments in all activities relating to the banking
     system




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                      COURSE DESCRIPTION

 This subject is the continuation of Islamic Law of Property. It will
  expose business transactions as well as property management in
  Islamic to the students. It will focus on trade, commercial
  transaction and financial transaction such as savings (wadi’ah),
  partnership (musyarakay/mudarabah), mortgage (Al-Rahn) and
  collateral (Al-Kafalah/Al-Dhamanah)




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                               ASSESSMENT
    1.   Test 1          :      15%
    2.   Test 2          :      15%
    3.   Essay           :      30%
    4.   Final Examination :    50%

    TOTAL                       100%




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                   ANALYSIS OF ISB540 PAST YEAR QUESTION
             S1 2006   S2 2006   S1 2007    S2 2007   S1 2008   S2 2008   S1 2009   S2 2009   S1 2010   S2 2010   2011
SHARIAH        X         X         X          X         X         X                   X         X                  *
MUAMALAH       X         X         X          X         X         X         X                   X         X        *
RIBA           X         X         X                              X         X                             X        *
QARDH                              X                    X                  Xd         X        Xd         X        *
KAFALAH                                                 X                  Xd         X                  Xd        *
RAHN                     X                    X                   X                             X        Xd        *
HIWALAH                                       X         X                  Xd                   X        Xd        *
MURABAHAH      X         X                             Xd                             X        Xd        Xd        *
BBA                                X                   Xd                   X         X        Xd         X        *
SALAM          X         X                             Xd         X                   X         X                  *
IJARAH                             X          X                   X                   X         X                  *
WADIAH         X         X                    X        Xd                   X                  Xd         X
WAKALAH                            X                                        X                   X         X
MUSHARAKAH               X         X          X         X         X        Xd         X                   X
MUDHARABAH     X                   X          X         X         X        Xd                  Xd         X
SARF                     X                                                                               Xd

       6                                   Xd = Definition only
                                 LIST OF DEFINITION
CONTRACT       DEFINITION
FIQH       L   The true understanding of what is intended
           T   The knowledge of the laws of the Shariah, relating to men’s act and that have been derived from
               specific sources and evidences.
SHARIAH    L   The road to watering place; the straight path to be followed

           T   Rules which are ordained by Allah for His servants by sending His Messenger

MUAMALAH   L   Dealings, social intercourse, behaviour, transaction; to interact
           T   Sharia rules which pertain to widely life
BAY’/      L   Buying and selling or both in the same time
TRADE
           T   The transfer of a definite use of property in perpetuity in exchange for a price

AQAD/      L   Tying tightly, as in tying a rope. It also means to make covenant and to give an oath.
CONTRACT
           T   An engagement and agreement between two persons in a legally accepted, impactful and binding
               manner
RIBA/      L   Excess quantity, addition, an increase above its original size or amount
USURY
           T   Trade Riba: Unlawful gain derived from the quantitative inequality of the counter-values in any
               transaction purporting to effect the exchange of 2 or more species which belong to the same
               genus(category) and are governed by the same efficient cause(illah)
               Debt Riba: A predetermined excess or surplus over and above the loan received by the creditor
               conditionally in relation to a specified period

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                                  LIST OF DEFINITION
CONTRACT        DEFINITION
QARDH/      L   To cut something off
LOAN/DEBT   T   Specific contract on transferring a specified property to another party on condition that a
                similar property will be given back in return
QARDH       L   Beneficial loan, benevolent loan, gratuitous loan, and beautiful loan
AL-HASSAN
            T   A debt that is free from any type of predetermined condition or promise to repay back more
                than the original amount stated in the contract
KAFALAH     L   Guaarantee, bail, surety, responsibility, suretyship
            T   The pledge given by the guarator/surety (al-kafil) to a creditor (al-makful lah) on behalf of the
                principal debtor (al-makful anh) to secure that the guaranteed (al-makful bih) i.E the debtor,
                will be present at a definite place, e.G to pay his debt, or fine, or, in the case of retaliation, to
                undergo punishment.
RAHN        L   Constancy, or holding and binding

            T   To make an object with economic values in islamic law perspective as a trust for the payment
                of debts, so that enabling mortgagee (murtahin) to get all or a part of the debts from the object
HIWALAH     L   To turn over; move or transfer

            T   To make a transfer of a debt from one debtor to the debtor account of another




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                              LIST OF DEFINITION
CONTRACT        DEFINITION
MURABAHAH   L   Increase of profit
            T   Selling a commodity for its purchase price plus a specified mark-up or profit agreed upon

BBA         L   Deferred payment

            T   Sale contract in which the payment of the price is deferred and payable at a certain
                particular time in the future.
BAY’        L   Pre-payment
AL-SALAM
            T   A sale with postponed delivery of the merchandise but immediate payment of the price.
IJARAH      L   Compensation

            T   A contract of proposed and known usufruct with a specified and lawful return or
                compensation for the effort or work which has been expended.
AITAB       L   Hire-purchase

            T   Owning the benefit of certain assets for a specific period of time, by paying an agreed
                sums of rental, with an agreement that the owner will transfer the rented asset to the hirer
                at the end of the agreed period or during the period, provided all rental payments or
                installments have been made in entirety



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                            LIST OF DEFINITION
CONTRACT          DEFINITION
WADIAH        L   to leave, quit, abandon
              T   contract whereby a person leaves his property for safe protection to another person

WAKALAH       L   Agency, representation, proxy

              T   The appointment of someone to take over the appointer’s affairs on his/her behalf for
                  the purpose of accomplishment of certain tasks
MUSHARAKAH    L   Mixing of two properties so that they could not be distinguished from each other
              T   A form of partnership where two or more persons combine either capital or labor or
                  creditworthiness together to carry on a business venture on condition that they will
                  share the profits, enjoying similar rights and liabilities.

MUSHARAKAH    T   Two or more partners purchase any asset (machinery, property, etc.) and their
MUTANAQISAH       intention is that one or both partners will use this asset or rent out their share and one
                  partner undertakes to purchase the share of other gradually

MUDHARABAH    L   Increase or profit

              T   Mudharabah is a contract or a partnership where one provides the capital and the
                  other the entrepreneurship with the profit being shared among them with a
                  predetermined condition


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                        LIST OF QURANIC VERSES
Bay’, Trade, Muamalah, Riba, Murabahah




Qardh, Qardh al-hassan, Bay’ Salam




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                  LIST OF QURANIC VERSES
Qardh al-hassan




Kafalah




Rahn




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             LIST OF QURANIC VERSES
Ijarah




Wadiah




Wakalah




Mudharabah




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     END




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