2. Issue to be discussedIssue to be discussed
ďFinancial Failure a reality
ďExploring reasons
ďInterest
ďTaxation
ďEthics
ďEstablished norms & practices
ďThe future
4. Possible reasons givenPossible reasons given
ďCyclical
ďMarket correction & Arbitrage Theory
ďThe ugly beauty of Free market
Are these acceptable ?
Or are there other
important factors that
are missing!
5. A deeper analysisA deeper analysis
ďExploited by greedy capitalist
ďGeared to the advantage of the capitalist powers
ďThe bigger fish eats the smaller fish
ďIn practice the stock market works quite differently that
theorized
ďEthics are over-stretched
ďCreates a hollow market â the bubble!
ďThe underlying fundamentals need evaluation!
6. The choice ?The choice ?
ďTo succeed or fail?
ďTo play with the lives of million on the basis of trail and
error?
ďIs the current system the outcome of the wisest men, or
should the system of the Wisest be acceptable ?
ďTo succeed or fail ?
7. Analysing the building block ofAnalysing the building block of
corporate financecorporate finance
ďInterest is the basis of finance
ďIs it justifiable ?
ďAre there problems associate with it ?
ďWhat is the fundamental problem ?
Global warning for interest !
8. What the Qurâan DECLARES (2:275):What the Qurâan DECLARES (2:275):
Those who eat Ribâ (usury) will not stand (on the Day of
Resurrection)
except like the standing of a person beaten by Shaitân (Satan)
leading him to insanity.
That is because they say:
"Trading is only like Ribâ (usury),"
whereas Allâh has permitted trading and forbidden Ribâ.
So whosoever receives an admonition from his Lord
& stops eating Ribâ (usury)
shall not be punished for the past;
his case is for Allâh (to judge); but whoever returns (to Ribâ),
such are the dwellers of the Fire â they will abide therein
forever.
9. Soorah Al-Baqarah Ayah # 276:Soorah Al-Baqarah Ayah # 276:
Allâh will destroy Ribâ (usury)
and will give increase for Sadaqât (deeds
of charity, alms, etc.)
And Allâh likes not the
disbelievers, sinners.
RIBA will be DESTROYED !!!!!!
10. Soorah Al-Baqarah Ayah # 277:Soorah Al-Baqarah Ayah # 277:
1. Truly those who believe,
2. and do deeds of righteousness,
3. and perform As-Salât,
4. and give Zakât,
they will have their reward with their Lord.
ď On them shall be no fear,
ď nor shall they grieve.
11. Soorah Al-Baqarah Ayah # 278:Soorah Al-Baqarah Ayah # 278:
O you who believe!
Be afraid of Allâh
and give up what remains
(due to you) from Ribâ
(from now onward),
if you are (really) believers.
MUST
give
up riba!
12. Soorah Al-Baqarah Ayah # 279:Soorah Al-Baqarah Ayah # 279:
And if you do not do it,
then take a notice of war from
Allâh and His Messenger;
but if you repent,
you shall have your capital sums.
Deal not unjustly (by asking more
than your capital sums),
and you shall not be dealt with
unjustly (by receiving less than
your capital sums).
13. Soorah Al-Baqarah Ayah # 280:Soorah Al-Baqarah Ayah # 280:
And if the debtor is in straitened
circumstances,
then (let there be) postponement
to (the time of) ease;
and that ye remit the debt as
almsgiving would be better for
you if ye did but know.
14. Soorah Al-Baqarah Ayah # 281:Soorah Al-Baqarah Ayah # 281:
And be afraid of the Day when
you shall be brought back to
Allâh.
Then every person shall be
paid what he earned, and they
shall not be dealt with
unjustly.
15. Ahadeeth on RIBA:Ahadeeth on RIBA:
Jabir (r) narrates that the prophet (s) cursed the
receiver and the payer of riba, the one who
records it and the 2 witnesses to the transaction
and said: âThey are all alikeâ (Tirmidhi)
Abu Hurairah (r) narrates that the prophet (s) said:
On the night of Ascension I came upon people whose
stomachs were like houses with snakes visible
from the outside. I asked Gibril who they were. He
replied that they were people who had received
riba.â (Musnad Ahmed)
Abu Hurairah (r) narrates that the prophet (s) said:
There will certainly come a time for humanity when
everyone will take riba and if he does not do so, its
dust will reach him (Abu Dawoud)
16. Is RIBA Haram in IslamIs RIBA Haram in Islam
ďIt is a serious kabair; if not left in hell-
fire forever
ďIt is clearly haram in Qurâan & hadith
ďThere is absolutely no difference
amongst the Fuqahah on Riba
ďIt is a sin in Judaism & Christianity
ďIt is not considered a good practice in
Hinduism, Buddhism, or Maoism
17. Views on RIBA/INTERESTViews on RIBA/INTEREST
ďPlato disliked it â âAnti-humanâ
ďAristotle condemned it
ďEarly Roman Empire prohibited it !
ďLex Genucia of Rome â Illegal (340BC)
ďFederal Shariat Court â Anti Islamic
18. Federal Shariat Court-Contrary to IslamFederal Shariat Court-Contrary to Islam
ďGovernment Savings Banks Act 1873
ďThe Interest Act 1839
ďThe Code of Civil Procedure, 1908
ďThe Co-operative Societies Rules, 1927
ďThe Negotiable Instruments Act, 1881
ďThe Land Acquisition Act, 1894
ďThe State Bank of Pakistan Act, 1956
ďThe Insurance Act, 1938
ďThe West Pakistan Money Lenders Rules,
1960
ďThe Co-Operative Societies Act, 1925
(Banking & Finance (For BCom, Part 1), Prof M Amin Khalid, Karachi 2002)
19. Federal Shariat Court-Contrary to IslamFederal Shariat Court-Contrary to Islam
ďThe West Pakistan Money Lenders Ordinance,
1960
ďThe NWFP Money Lenders Ordinance, 1960
ďThe Punjab Money Lenders Ordinance, 1960
ďThe Sindh Money Lenders Ordinance, 1960
ďThe Banking Companies Ordinance, 1962
ďThe Baluhistan Money Lenders Ordinance, 1960
ďThe Banking Companies (Recovery of Loans)
Ordinance, 1979
ďThe Agriculture Development Bank Rules, 1961
ďThe Banking Companies Rules, 1962
ďThe Banks (Nationalization) Payment of
Compensation Rules, 1974
20. Consequence of RIBA in the HereafterConsequence of RIBA in the Hereafter
ďBarzakh: drowning in a pool of blood;
being fed thrown rock until Qimiyah;
ďStomaches filled with snakes;
ďIn hell-fire forever;
ďThe Wrath of Allah & His Prophet forever
ďCannot stand, beaten by worst enemy â
Shaitan; in a state of maddness
21. Definition of RIBADefinition of RIBA
ďIs a Arabic word with means âextraâ.
ďAny amount over and above the principle
amount is RIBA.
ďLate/penalty fees is also RIBA.
What is the fundamental problem with RIBA ?
22. RIBA in a controlled environmentRIBA in a controlled environment
ďIndependent in 1948
ďVery simple life; no complications
ďFollowing a barter system
ďIn the case study, all other economic
variable have been removed
23. 5 simple people â use barter system5 simple people â use barter system
ďSajid Fish
ďAbid Wood
ďNasir Fruits
ďFurqan Salt
ďSalman Entertainer
ďNot always happy, but cooperate
together in barter system.
ďEach feels he is cheated, would like to
change the system ?
24. Loaned money : solution to problem!Loaned money : solution to problem!
ďOne blessed day, Uncle Yahoodi, arrives with
the answer to their problem.
ďLoaned money, as aid, minimum interest;
for the development of the society
ďUncle Yahoodi ready of help out these
people;
25. Loan taken â is this fair (halal) ?Loan taken â is this fair (halal) ?
Name Principle Interest
ďSajid 1000 + 100
ďAbid 1000 + 100
ďNasir 1000 + 100
ďFurqan 1000 + 100
ďSalman 1000 + 100
=========================
Total amount given 5,000
Thus total money supply 5000 ONLY
Is there any problem in the above transaction?
26. RIBA ExposedRIBA Exposed â impossible to return â does not exist!â impossible to return â does not exist!
ďLoan taken = 5,000
ďThus, total money supply 5,000
ďHow will they return 5,500!
ďThe Riba amount 500 â EXTRA does NOT exist
ďRIBA impossible to return ->ZULM=HARAM
27. Returning RIBAReturning RIBA
ďTrying to do the impossible
ďEvery Haram has its price !
ďIn order to achieve the impossible,
the whole society will be affected
negatively!
28. Negative consequence of InterestNegative consequence of Interest
ďInflation (in the long term hyper-inflation/sprilling)
ďShort money supply
ďCurrency devalued
ďUnemployment (stagflation),stressful working conditions
ďCheating and fraud
ďDeteriorating quality of good & services
ďOrganized crime, supported by influential people
ďForeigners dictating policy
ďPolitically divided
ďForeigners acquiring national assets
ďForeigner instructing to disable national security
ďLawlessness, helplessness
ďRampant corruption
ďEffectively a failed state
ďWAR!
Interest + inflation =
sprilling inflation =>
Hyper inflation=ACHEIVED
29. Our progress after 60 years of Riba!Our progress after 60 years of Riba!
30. 5 simple people sit to think5 simple people sit to think
ďUncle Yahoodi came to help us ?
AID should be forgiven !
ďTo help us, Uncle Yahoodi gave us 5000.
So we should return 5000!
ďUncle Yahoodi gave us worthless paper, in
exchange he took over our country!
ďWhy did we accept his money on his terms?
ďWhy didnât we buy gold ?
Extremely
Profitable
Business
Transaction
31. Recent history of bankingRecent history of banking
ďJews, were jewelers & goldsmiths
ďPeople would keep their valuable, in their
vault, in return for service charge and a
promissory note.
ďIt was noticed that only 1 in 20 people
returned for their valuable. 95% did not
return!
ďTheir promissory note was been circulated
in the whole town, because of the ease of
use.
32. They began to print NOTES!They began to print NOTES!
ďIf they had gold worth ⏠100, they could
easily print and distribute ⏠2000 worth!
ďThey gave loans
ďThey bought real assets: property,
building, farms, horses, gold mines!
ďThey began to keep mini armies!
ďIn the town they became Lords!
33. At the national levelAt the national level
ďThey gave their allegiance to the king of the
area.
ďPromised to finance the âwarâ
ďIn return only they would be allowed to
legally print money in the country.
ďWhenever the king needed money, they
would freely give, in return for assets of the
kingdom. New kings became slaves in their
hands!
34. Proof of Jewish instigated warsProof of Jewish instigated wars
Napolean Bonaparte:
The Jews provide troops for my campaign
in Poland, but they ought to reimburse
meâŚThey are a state within the state. The
Jews are master robbers of the modern
age; they are the carrion birds of
humanity âŚ
(Speeches before the Council of State May 7th
, 1806, Book: âAntizionâ by William Grimstard)
35. Proof of Jewish instigated warsProof of Jewish instigated wars
Winston Churchill, UK Prime Minister:
This movement among the Jews in not new. This
worldwide conspiracy for the overthrow of
civilization and for the predominance of Jews
is even more astounding. The same evil
prominence was obtained in the brief period of
terror âŚ
(Illustrated Sunday Herald, London, February 8, 1920)
36. Proof of Jewish instigated warsProof of Jewish instigated wars
Henry Ford, 20th
Century U$ Tycoon:
Get hold of 50 of the wealthiest Jewish
financiers, the men who are interested
in making wars for their own profit.
Control them, and you will put an end
to it all.
(Cleveland News, September 20, 1923)
37. Proof of Jewish instigated warsProof of Jewish instigated wars
The Bank of England was established in
1694 to help King William III out his
governmentâs financial crisis!
(Banking & Finance, Bcom Part 2, Prof Amin Khalid, Karach, 2002)
What crisis ?
38. Who is authorized to print money ?Who is authorized to print money ?
39. Another issue of interest!Another issue of interest!
The Prophet (p) said:
âEven if riba is much,
it will end up being a small amount.â
(Reported by al-Haakim (in Mustradak), # 2/37; see also Saheeh al-Jaamiâ, # 3542).
40. The stock market in practiceThe stock market in practice
The stock market operates very differently in practice!
There are elements of:
ďGharar (uncertainty)
ďMaisir (gambling), betting, speculation
ďRiba (interest)
ďQimar (one parties loss is anotherâs gain)
ďKazab (lying, and misleading)
41. Example of RibaExample of Riba
ďListing of banks & interest based financial
institution
ďSolution: Donât deal with them!
42. Changes in stock price â more than profit/lossChanges in stock price â more than profit/loss
ďExpectations & rumors
ďFuture expectations more important than current realities
ďBig investors have great influence & control
ďNews
ďP/E value plays a major role â generally over inflated valuation
ďA company may earn a profit, and the price may go down!
ď Expectation & speculation
43. KSE-Controlled by big fish ?KSE-Controlled by big fish ?
The âbig fishâ (BF) toy with KSE
ďAKD
ďJahangir Sadiqque
ďArif Habib
44. The stock market gameThe stock market game
Month KSE Siemens Activity
Jan 2006 8,000 1,000 BF begin game
Feb 2006 9,000 1,100 Buying
March 2006 10,000 1,200 Buying
April 2006 11,000 1,400 Buying
May 2006 12,000 1,500 Buying
June 2006 13,000 1,700 Selling
July 2006 14,000 1,800 Selling
August 2006 16,000 2,000 Selling
No more momentum, and the market begin to decline!
Now itâs a BEAR market!
Price increase is not because of company profitability!
45. Intention of buyingIntention of buying
ďNot buying because of the profitability of companies
ďOnly because the market is going up & up-speculation (bull)
ďThe analysts of the Big Fish cautiously create a fervor, & mislead
the Small Fish â (Engineering QIMAR!!!)
ďGamblerâs instinct at work!
ďThe Big Fish make their money, at the expense of the Smaller Fish â
Qimar
ďThe Big Fish safely exit the market, at the expense of the Small Fish
(bursting of bubble â market crash !)
ďThose trading on margin are wiped out !
ďQimar,Maisir, Kazab, Riba & Gharar ALL present in practice!
46. Big Fish expert planning & controlBig Fish expert planning & control
Month KSE Siemens Activity
August 2006 16,000 2,000 Selling futures options
Sept 2006 14,000 1,800 Selling futures options
Oct 2006 12,000 1,600 Selling future options
Nov 2006 10,000 1,400 Selling future options
Dec 2006 8,000 1,200 Selling future options
Jan 2007 7,500 1,100 Buying
Feb 2007 7,000 1,000 Buying
March 2007 6,500 900 Buying
The Big fish eat all the small fish, & are preparing for
round 2!
Now itâs a BULL market!
47. The stock market game PROOF -yearlyThe stock market game PROOF -yearly
50. Ethics & moralityEthics & morality
It has been narrated in a hadith of the Prophet (s):
Verily, I have been sent to perfect morals.
He (p) was asked: "What is the religion?" He (p) replied:
"The religion is morality."
When asked, "What is woe (or affliction)?"
He replied, "Real affliction is lack of morality."
Nothing that will be weighed on the Day of Judgement will
weigh heavier than moral action. [Abu Daâud and
Tirmidhi]
The Prophet (s) said:
Verily truth will lead to goodness and goodness will lead to
heaven. A person who develops a habit of honesty will be
accepted by Allah as an honest person. But lying leads to
evil, and evil leads to the Hellfire. A person who lies until
dishonesty becomes habitual will be written off by Allah
as a liar.
51. Western concept of civilization flawed-Western concept of civilization flawed-
international brotherhood!international brotherhood!
The Messenger of All h, peace and blessings of All h be on him, saidÄ Ä
"A Muslim is the brother of a Muslim;
he does him no injustice,
nor does he leave him alone (to be the victim of another's injustice);
and whoever does the needful for his brother, All h does the needfulÄ
for him;
and whoever removes the distress of a Muslim,
All h removes from him a distress out of the distresses of the day ofÄ
resurrection;
and whoever covers (the fault of) a Muslim, All h will cover his sinsÄ
on the day of resurrection."
(Sahih Bukhari, Book 46, Hadith #3)
52. Lasting impact of Ahadeeth, unparalled in historyLasting impact of Ahadeeth, unparalled in history
The Messenger of All h, peace and blessings of All h be on him, said:Ä Ä
"Do not hate one another and
do not be jealous of one another and
do not boycott one another,
and be servants of All h (as) brethren;Ä
and it is not lawful for a Muslim that he should sever his
relations with his brother for more than three days."
(Sahih Bukhari, Book 78, nathid #57)
53. What is the future ofWhat is the future of
interest ?interest ?
54. Should Interest based loans be usedShould Interest based loans be used
for national development ?for national development ?
ďBuilding of Dams ?
ďBuilding of bridges, roads, infrastructure ?
ďTo acquire technology ?
ďFor Educational programs ?
ďTo promote Pakistan ?
ďTo spread Islam ?
55. Which is a greater sin:Which is a greater sin:
Pig farming or Interest based banking ?Pig farming or Interest based banking ?
ďHowever, there is hardly any pig farm in
Pakistan!
ďNo export of pig or its products !
ďYet, abundant branches of interest based
banks scattered throughout the country !