Below is a scenario for an import deal on a machine, wherein the supplier was paid a deposit in dollars, which converted to rands amounted to R 264 48

Answer

This is not a Muraabahah deal. It is a pure Riba deal. In this scenario three parties are involved: The Seller, the Buyer and the Bank. The sale is between the Seller (the owner of the machine) and the buyer. The buyer pays the deposit to the Seller. The bank then finances the balance. In other words the bank advances the buyer a loan on which it charges riba. The R61,000 charged by the bank is not profit. It is plain riba. The bank had paid the balance owed by the buyer to the seller.

In the scenario presented by you, the buyer paid the seller (owner of the machine), a deposit of R41,000 which leaves a balance of R223,000.

The banks pays this outstanding amount to the seller. Then the bank adds its interest of about R83,000 on this loan. The buyer has to pay the capital sum plus the interest over 60 months. This is a plain riba transaction which is passed off by the bank and its corrupt, haraam shariah board of mercenary juhala molvis as a 'muraabahah' deal. Islamic nomenclature is used to bamboozle laymen.

What is beyond our comprehension is that despite it being fully within the ability of the bank to effect a valid Muraabahah deal without any difficulty, it still desists from doing so. We attribute this attitude to the western education and western upbringing of the owners of the bank. As for the molvis who have treacherously betrayed Islam and sold their souls for a few rands, their attitude is comprehensible. They are plain mercenaries and bootleggers who are insanely pursuing the carrion of the dunya.

While we criticize the attitude of the bank, we do not begrudge the R83,000 gain which can be made in a valid Muraabahah deal. The gain of R83,000 on an item costing R265,000 is relatively not excessive. The gain is acquirable over five years. If a trader, e.g. a cash and carry or a lucrative supermarket, invests R265,000 in stock, it could be turned over repeatedly a number of times in a year. In one year the profit will be more than 100%, whereas the bank's gain is only 14% per annum.

Therefore, we are not accusing Albaraka of exploitation. The traders are genuine exploiters, not the banks, i.e. comparatively speaking. Our criticism is levelled at the numb-skulls of the bank's owners who are just too stupid to understand the simplicity of setting in order their transactions to eliminate the riba factor. Consider the example in the question. To render the deal compliant with the Shariah, the bank had only to pay the seller the price of R265,000 for the machine. After purchasing it, the bank should sell it to the client for R365,000 (for example) payable over five years as is the arrangement. Why stipulate the initial payment to be made by the client to the seller, thereby effecting the deal between the seller and the bank's client? It is so simple to rectify the issue to ensure total compliance with the Shariah.

If the bank's owners can only understand the imperative need to structure their deals correctly, they will still make the full gain they have in mind. There will be no need for us or anyone else to criticize the bank. In addition, the bank will be able to make a huge annual saving by disbanding its stupid, haraam 'shariah' board. Any Shar'i guidance it requires is available FREE by consulting uprighteous Muftis who do not charge for fatwas. A mufti who feels complacent and snug sitting in a bank building and devouring the haraam riba he receives as wages from a bank is a member of the ulama-e-soo' fraternity. It is not permissible to seek fatwas from such corrupt scoundrels who stab Islam and the Ummah in the back.

My Scenario One Purchase Price

264,480.00 Less: Initial Payment to Seller -41,560.00 Less: Initial Payment to Abl -21,710.00

Selling Price

201,210.00 Add: Abl Profits ( 14% annualised)

61,972.00 Balance Due

263,182.00 period ( in months )

60 monthly instalment

4,386.37