Islamic Finance Guru REACTS to Sh Yasir Qadhi & Dr Main Al-Qudha Islamic Finance Interview

A few weeks back, prominent scholar Shaykh Dr @YasirQadhi interviewed Shaykh Dr Main Al-Qudha, a very respected and senior scholar of Islamic jurisprudence and a specialist in Islamic finance at @EPICMASJID. They had a very juicy interview which in this video, I'm going to carefully dissect and commentate on.
Put your seatbelt on folks, this one's going to really interesting. Don't forget to comment your thoughts on our analysis and not to mention tell us what other videos you'd like to see from us.
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TIMESTAMPS
00:00 - What is going on?
00:37 - Q1: Can you please define what is Riba and why is it problematic?
05:44 - Ibrahim has a different perspective
07:43 - Risk-sharing approach; the Islamic ideal?
08:06 - Q2: Is every loan that benefits the lender Riba?
08:30 - Analysis: why is Riba problematic?
11:47 - Q3: What are some examples of Riba?
14:02 - Is car finance Riba?
14:53 - Real life example of Riba
18:50 - Q4: What does it mean to Mortgage a house?
21:58 - Q5: Do the rulings of Riba need to be rethought for fiat currency?
26:22 - Analysis: The nature of money in modern times
30:03 - Q6: What makes Islamic finance islamic?
30:55 - Jewish finance? Christian finance?
33:19 - Islamic finance = halal-enough finance
34:00 - Q7: What can we do against the global financial market?
36:59 - Analysis: Can we actually fight the system?
40:17 - You need to do one thing (listen carefully)
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[@oakimon]

this is the view i find most compelling: Interest incentivizes the creation of money without real economic activity resulting in more money chasing limited resources, and hence higher prices. So being part of such a transaction means contributing to the injustice in society where others suffer as a consequence. as muslims we are to make sure that our actions dont harm other human beings, who Allah calls His best creation.

[@mohammadikram687]

And tools like these just proves ur point : Mortgage Backed securities(MBS) Collateral Debt obligation (CDOs) Repo Market Or Secondary Market Taking part in Options market by taking loan and list would never end😢

[@Kn1ghtr0]

In light of your statement, does this mean that “cash back” from your credit card may in fact be haram in that I may be directly benefiting from another persons hardship who has to pay interest to that credit card company. In other words the Credit card company may be “robbing Peter to pay Paul” ?

[@jamalkhalil77]

Islam means submission, Allah says riba is haram, therefore, it's haram, period.

[@adamlabnaki9216]

Would love to see you on 'Sapience Institute' to speak to someone like Hamza Tzortiz or Suboor Ahmed or "Blogging Theology" to speak to Br Paul to chat to about economics.

[@peacenow6618]

May Allah Accept your works, and make it a means of acceptance and Guidance for the Ummah!

[@peacenow6618]

جزاک اللہ خیرا

[@AbuAasiyah.]

BarakAllahu feekum. MashaAllah, this was super educational for me.

[@hardplabber1859]

I have watched that before. May Allah give jaza to our beloved Sheikh Yasir and guest and you as well. For ordinary people, finance is a very intrigued subject

[@waheeb_m]

Great video

[@ShumonM]

Gonna have to err on the safe side and go with Dr Main on this issue. Always go with the safe option.

[@hakim.a78]

Jazakoum Allah ou kheir for these interesting videos. A video discussing the position of Islam on selling covered calls would be appreciated and of great help for many I am sure. Salam aalaykoum wa rahmatoullah.

[@fightforlife4661]

I have heard varying views on Zakat on salary ie income on sale of your professional services. Some scholars equate it to zakah on sale of agriculture product. Others simply profess calculation of Zakah on cash and liquid holdings independent of how much you earned. Appreciate thoughts

[@tanweerchiktay7482]

Wa Alaikum mus Salaam

[@EsoTarek]

So what's a viable mortgage solution in the UK?

[@user-sn9ql3kv4y]

Does anyone know which islamic finance companies that dont deal with the “secondary market” he mentions starting at 31:20?

[@mohammedmiah7554]

Salam brother good video, question on my part why do you think HP is okay I understand pcp. It not why HP is halal.

[@zahidmuslim4110]

ALLĀH Forbidden ribah/ interest...as Muslims , we submit to the Commands, without justifications/ understanding/ flip-flops !!!!

[@Xenor999]

Well if you don't understand what actually is riba and actually misunderstand the term how can you say you just accept that riba is actually haram when in actuality what you think riba actually is might be wrong.

[@anishvali4112]

I have a question on student loan 5 (UK) which is RPI index based. Is this allowed or not?

[@HiddenAdamO]

👍

[@sahillarya06]

Question on Mortgage loan If you don’t borrow from bank and carry on paying the rent. If you borrow from in long run house will be on your name so benefiting party is borrower ?

[@shamailsiddiqui1680]

if your borrow money on riba your at war with allah and the prophet muhammad curse is on u!!.. if the prophet curses u.. then your prayers your hajj all that might not even get accepted.. your in big trouble .. and the quran always say you might not even be a believer at that stage lol.. and if u keep paying rent your paying sadaqa and allah will give u increase inshallah.. think differently not dunya minded..

[@bashh568]

Good video and completely agree with you that there isn't a clear, coherent, present day answer to how Islamic Finance can tackle inflationary impact on currency. In fact if you calculate what a typical 25-year mortgage costs, check your mortgage offers and it says for every £1 you borrow you'll pay back say £1.69. On a £100,000 loan a borrower will repay £169,000. But with average 2.5% inflation per year, £100,000 will be equivalent to £185,000. So how is the borrower at fault here?

[@bashh568]

As for these alternative system/credit union etc, it's unrealistic let's be honest

[@hussainthebane]

Being equivalent to £185,000 at the end doesn't mean it is worth £169,000 if spread out over the time period. You are discounting from the very end as opposed to each period in time you pay the instalment. For further understanding, research the principle of an annuity and how it is discounted.

[@reglee3456]

I don't know much about economics and I could be wrong so just take this with a grain of salt: Initially it does look like the borrower is benefitting, and probably so, but the main issue is that the loan props up the housing market by a lot more than it should actually be, which is kind of monopolistic as the main beneficiary are the banks, making the wealth gap way higher. Pretty much the price we pay for houses nowadays are much higher which will take more time and effort to pay back and so that's the actual downside for your everyday borrower/citizen. But then again it's pretty tricky to pin down exactly what the right thing to do would be, when factoring incentives, would our community miss out/fall behind by not investing in housing, Pareto distribution/principal etc.

[@reglee3456]

I mean you should let the market decide, but then again when your have the huge loans like mortgages over 30 years, you kinda don't feel the responsibility instantly/delayed for the future, and so when you have everyone getting mortgage loans on a macro scale at the same time, everyone ends up paying a premium on what the house should actually be worth as its being propped up by credit money, which in a way corrupts the free market

[@hardplabber1859]

Is sukuk (Islamic bond) haram?

[@hasanbinismail7093]

Assalamualaikum sir. Please answer me. Bank nifty is halal or haram ?

[@nurulislam1284]

I still have yet to come across a video on car leasing and php, where it clearly explains how it is halal regarding late payments fees...... And also the issue about defaulting..... If they are in the contract is it halal.... Can someone please direct me to a fatwa or just a good video explaining this

[@IFGuru]

We'll put this on our to-do list to do a full video on it.

[@nurulislam1284]

@@IFGuru jazakallah

[@zahidmuslim4110]

May ALLAH Preserves Muslims from falling traps of corrupt/ misguided scholars...

[@FlexSZN23]

I love how none of these scholars never get into the actual definition of riba and how that actually applies to a fiat currency. They are applying ayah’s in the Quran that came down at a time where people were dealing in gold, silver, barter etc, they didn’t have banks for money storage let alone a central bank with the power to inflate and deflate a currency, so back then the Riba was the rich making ppl double, triple their gold, barley etc. Fast forward to today, our “money” is literally just a paper IOU that the treasury borrows from the federal reserve, the federal reserve charges interest and this interest is paid by tax revenue (FY 2022 out of $4.8 trillion tax revenue, $387 Billion was paid to holders of T bills; i.e. federal reserve, the people who loaned the banknote IOU) so we are all paying whether or not you intend to or not, that’s the reality of our financial system in the US and the entire world save for a few countries. The money itself is riba. The scholars are erroneously likening paper fiat to gold and silver (which have intrinsic value & are immune to inflationary/deflationary cycles).

[@mohdazminishak6387]

Totally agreed! In the video, Dr Main was asked on this by Dr YQ, but his answer is very dissapointing and hugely unacademic…

[@sx1918]

So, if we go by what you mention, are you saying let's do more Riba? Even if we stick by the idea of inflation and assume it's valid, this becomes more like gambling. You have no decisive information that the money will be less valuable 10 years down the road, you don't even know how much less/more it would be. The Shiekh is not missing the point, he is pointing out a very important aspect, which is the fundemental idea of loans. Does a pound of wheat compared to gold have the same value it as 100 years ago? So, there is some "inflation" going on here on some side.

[@BlueBlue23]

Understanding how money is created is obviously important, however as Muslims we also need to remember what's the purpose of money. And money and transactions are nothing but means of ibadah. Unlike the non Muslims we trade and make money to basically invest in paradise

[@alchemistbrotv1707]

For cash back what about the source of the money being not 100% halal? Couldn’t that make cash back wrong to take? Because if we know most of Amex money is coming from interest, the cash back is supplemented by their interest income. Even not just from halal/Haram technicality, it just seems wrong to benefit from interest

[@adamhammouda9125]

@ifg - would love to see more discussions of fiat currency and how that might effect traditional islamic thought around what represents riba, and what is 'simple interest' to account for inflation. Leaving the abstract notion of "the time value of money aside", if you buy that the "value" of money globally is mostly a function of the us federal reserve, then would much interest that exists in bank accounts not really be riba, but simply an adjusted currency valuation based on fed lending rates? This is really a strawman hypothesis of what another theory of riba could be - I'm not an expert, but hoping an expert could make this strawman into a more robust strawman, and then debunk the theory. Wassallam!

[@muslimabubakar9384]

Assuming you only payback the amount principal in USD after 1 year, couldn't that implies you are cheating the bank ? Since after one year the purchasing power of the principal depreciated due to inflation factor! Why would someone lend out his money at loss???

[@xondeez757]

What if someone wants to loan money from me and i go buy gold worth that money then give the person the gold? its seems like a loophole where your money stays around the same

[@touristonline4171]

I am not a knowledgeable person but what do you think about "giving loan in the value of gold in money and when the borrower giving it back he should give the value of gold in money in that time".

[@abedalazizkaterji7230]

Nice video! I'm curious can you not breathe from your nose? If so, I just wanna say i have the same issue

[@ensyy_]

Is there any halal mortgages available in the UK?

[@Livaren]

​@AbirHossain-mv6rp how do you reconcile this with the fact that Mufti Faraz Adam and even IFG say that finance through providers like Pfida, Gatehouse bank, Strideup, Wayhome are permissible?

[@ahmedsadeed370]

If rent seeking is the problem in interest, then by that logic is renting houses also haram since the landlord hasn't done anything productive (I am excluding developers in this case)?

[@amayoka]

I think up to not many years ago, rent was haram (majority opinion).

[@makboolhuzaink3660]

Are you from UK

[@Momo8]

Yh he is

[@yaakcon]

IS USING CREDIT CARD HARM IF YOU PAY THE WHOLE BALANCE BEFORE THEY APPLY AN INTEREST?

[@mine3693]

Salam. I would argue that he best way to look at any agreement should always be three-fold. You cannot compare only the results ... you need to look, as well, into the starting point and the process of obtention (the middle part in the story of the cow). Otherwise, a piece of meat halal or non halal looks alike, if you limit your investigation to the results. The second point I would argue is that banks see the cost opportunity of the money they hold and wish to sell a "buying power" to the "borrower" with a margin over time (not rent). This use of money to buy itself and create money from 'itself' is like a non-binary approach for pro-creation. It is FALSE. that is also why sales is fine and Riba is not. The third point is that the structure of the word RIBAA; first letter is RI meaning: seeing R with some weakness or incapacitation I; and the second and third letter are BAA meaning: something in itself BA that grows upwards AA. You see something growing but it is not TRUE. Moreover if you change the standards by which you are measuring (inflation is closer to defrauding the balance weights). The fundamental for value creation is as follow: Gold underground or any storage doesn't transform on its own, it is sleeping. Life underground or aboveground can transform and create (The LIVING is a name of ALLAH). those are the TWO ingredients for value creation and are required for proper valuation. Either you lend money or you enter an agreement with someone (biologically alive) that can transform or transport a stored value (called the economic activity for adding value), Making it more valuable. You always look at it from its starting point the Lender or the money holder. I would argue that Inflation with fiat currency is much more a problem when the central bank is privately owned versus public establishment. That can be linked to why the idea of decentralized ledger in the form of tokens rather then assets or piece of software prowess (like bitcoin) is very much in the public interest. bi tawfeek min Allah

[@samimidost6587]

I have an objection to the cash back fatwa ! AMEX encourages you to use card instead of paying cash thus they can get commission from the seller! When you pay with credit card you help bank to take 3% from the seller without any justification!!!???? If they claim that they are charging against a service, then it should be a fixed amount not proportional to the price of good, because it is the same service

[@user-sn9ql3kv4y]

Agree, is there justification for credit card companies to charge merchants a percentage to process payments?

[@Professional_Youtube_Commenter]

What about the fact that when you have money in an account that pays 0% interest, and another account that pays 3% interest. The relationship is the same. Sheikh made arguement that bank is taking the risk with your money they can gain or lose the money but they pay you your 3% reguardless. The bank does the exact same thing with your money if the acount pays 0%. The bank will still invrest in stock market, give that money to people for personal loads/buisiness loans/mortgages. That arguement would still make the 0% account haram becasue they are taking risk with your money and you're not sharing risk with them. In reality risk is hedged so much that there is no risk to the bank.

[@FreePizza007]

I am kind of disagree with what you say that in the beginning of a video, money is printed and then lent out. I disagree with you on this matter. I believe that money is printed and lend out only if a borrower is found for example in the case of quantitative easing, the government was a borrower as soon as the government made a promise of repayment and had a contractual agreement with the finance organisations - only at that point the money is printed out because the money had a promise of repayment similar thing to a bank loan and similar thing to a house purchase. As soon as a borrower is identified and confirmed and the contract side so at that point, the money is printed out because as there is a promise of repayment thus there is low risk. It's just moving the process the other around from what you said. Additionally, interest is the reason for inflation is purely because of interest bearing lending in the modern society inflation would not happen If interested not exist and people would not be borrowing so much and prices would not rise due to increased purchasing. Thus the conclusion in my view is that we the borrowers mainly cause inflation.

[@mahirabdulahi4131]

We the borrowers borrow in interest so your argument is null

[@BlueBlue23]

@@mahirabdulahi4131 I think he is trying to say that is because we should not have the interest in the first place. Borrow and lend as much as you want but without the interest

[@A.--.]

Overdraft fee could be for the paperwork so may not be Ribba. Cashback is not free money from the bank. Its an incentive to buy your data or get you hooked on using their system ie customer acquisition cost. This sheikh is not clear on his convepts and is an agent of a mortgage company called Guidance and therefore his opinions are biased.

[@eggshellsandyolk5746]

your left mustache line is thinner than the right side

[@TheTruthSeekerMe]

Incredibly useful info

[@swymbss]

The term guru has a shirki origin wouldn’t be better to avoid it and not imitate kuffar?

[@farishope6540]

Bro, please don't use the word guru it belong to idols worshipers.

[@The_Dua]

You cannot have a islamic system which works with one that is haram, their will always be those who look for loop holes but they just fool themselves. Alot of muslims do it and say its only for one house, the landlord is using my rent to pay the mortgage, im in non muslim lands so its alright.... dont fool yourselves.

[@Nobody-yq9fk]

Don’t worry about them, the angels will drag them on their face to face a judgement that they won’t like.

[@gsem000]

The flaw of. The share is that he assume that fiat money is halal, to justify that is that it is with fiat money that one can buy gold and silver. He is wrong and like intelligence and accument. Something that buys halal thing does that make that 'something' halal. I can buy gold with drug, or a prostitute can give her body to acquire gold. Same for fiat!! It was made into forced law to use it, does not make halal and because of that people are forced to use it to be the main means to buy gold. On the private level I can use something not forced on us (and yet much halal that fiat money which can be printed out of thin air unlimited) such a BTC which has a limited fixed supply (21m coins). That does not make BTC halal!! Therefore fiat money is haram, its worth is just the worth of the paper or plastic made out of it, and its creation out of thin air is by itself Riba (NOT JUST ITS lending with interests). Therefore zakat cannot be paid in fait money and one should only pay 'a sadaqa' the general term for 'CHARITY', because zakat which means 'to purify' cannot purify something that it haram inherently. If my wealth come from prottituion or murdering people, I will never ever be able to purify the source of my haram wealth. We act only because of daroorah (nececity) and try our best to act in such a way that we do not steal the sweat of our Muslim believers. One should study carefully the ijtihad of Riba in Dar al-harb under Imam.al-hanafi and some of the Hanbali madhhab who reach the correct fatwa how to deal when Muslims leaves in dar al-harb or dar al_kufr, and understand dar Al Islam is only under the khilafah system. Then you know what to do or at least you will do the best what you can do. You will never hear any true scholars. Talking about that in the west because they are hypocrites or cowards or simply scared because if they speak the truth of classical concept they will be arrested. They mentioned of the classical concessus only to mention dates for dates or wheat for barley etc. There is no Islamic Bank, there can be no halal financing as long as fiat money is used and holding fiat money is haram by itself. Yet if I cannot find food and there is only pigs, by necessity I can eat, and lasting as long as necessary as I am forced to (like being in guatannamo and being served only pigs or alcohol). The same with the haram fiat currency. But there is way to get out of this haram system and use it only to pay the forced taxation or fines imposed on you and to have the minimum amount of fiat money because the merchants selling the necessities Accept only fiats. Also don't forget that the price of gold is heavily undervued because of the existence of the fiat money, its yield set by the federal reserves and the market manipulations and worthless note instruments (such as gold shares, index gold and other shits). As RasooluLLAh predicted we will all be affect by the dust of Riba. The best we can do is minimize it and not be worry about it as along as we don't don't further charge interest to a Muslim nor receive Riba from a Muslim. I'm. Dar al-harb. When you have a savings in bank and you receice interests, search the highest interest possible (the interest giving to you will never ever compensate the inflation rate which is much much higher, so the money of tomorrow will always buy less that the money of yesterday and you always end up poorer). And if you still feel guilty to hold it, then distribute that worthless satanic paper money gain (from interests) to the poor or destitute as sadaq (zakah cannot be paid anyway). Pay Sadaqa at least worth the rate zakah, and better if you can pay a higher rate. Allah use the word Sadaqa as if to tell. Us that there will be time when zakah is unpayable , Allah knows best! Having a limited company, which is a legal entity, don't hesitate to borrow money (when badly needed) from banks when the interest is low (let's say 2%) and while the inflation is high (like 8%), you are the winner. And one of the purpose of forbiden Riba is to to exploit and enslave your brother Muslim. Here I receive the haram money printed out of thin air (banks can lend 10x the money they have in deposit) and use that capital and return the bank their 2% while inflation was 8%. And if. I fail to pay I. Just bankrupt the company. Bank will always be oberal the winner and if they fail because of their greediness they will be bailout by the government (to big to fail) by printing more fiat money out of thin air, via QE or bleeding a little bit the taxpayers. The latter will always happen.anyway, it is cyclic.!! Be smart and study study and study and if you are sincere Allah will guide you to the truth and found out the sheik who talks rubbish and the shuyookh who speaks truth or a lot of it.

[@user-sn9ql3kv4y]

Crypto will eventually replace all currencies in the future. Will it be haraam then still in your opinion?