Advice can be offered to the Muslim men who are so busy with affairs of da’wah that they neglect the rights of their families

Posted on January 28, 2018

What advice can be offered to the Muslim men who are so busy with affairs of da’wah that they neglect the rights of their families?

QUESTION: What advice can be offered to the Muslim men who seek knowledge at Islaamic centers, get involved in various affairs of da’wah, and then socialize with the brothers (at the masjid and elsewhere), while neglecting their families’ rights in the process? Their families suffer due to their absence and neglect. Aren’t they able to study and also work to provide for their families?

Islamic investment or Shariah compliant investment in India

Posted on January 27, 2018

Islamic investment or Shariah compliant investment in India

Many people do not invest in mutual funds as they feel it is forbidden under Islam (non halal) to invest in stock market related products.But there are many companies which qualify for investment under Islam and you can invest in them through Shariah compliant funds.

These funds will help you invest your money in shariah compliant companies and also purify non-Shariah compliant income (non halal income).

In long term equity investments can generate inflation beating returns.

What is Islamic investment (halal investment) or Shariah compliant investment?

Shariah compliant means investment which complies with principals of Islam. It is forbidden under Islam to invest in areas related to:

Alcohol

Tobacco

Gambling

Pornography, drugs etc

armaments and destructive weapons

pork and related by-products;

dead animals not slaughtered according to the rules of the Sharia(non halal food products)

gold and silver

armaments and destructive weapons

Institutions like banks which generate income from interest payment.

Companies with high debt.

Any other activity which as per Shariah board violates Islamic religious principals

Which are the Islamic investment (halal investment) or Shariah compliant investment options in India ?

Goldman Sachs CNX Nifty Shariah Index ETF, Tata ethical and Taurus ethical mutual funds are Shariah compliant investment options. These funds are indexed against Nifty-50 Shariah, NSE 500 Shariah and S&P BSE 500 Shariah.

Tata ethical and Taurus ethical mutual funds are actively managed funds, while Goldman Sachs CNX Nifty Shariah Index is ETF which tries to reflect composition of Nifty-50 Shariah.

Nifty-50 Shariah, NSE 500 Shariah and S&P BSE 500 Shariah are Shariah compliant stocks listed on NSE and BSE stock exchange.

How do mutual fund house and stock exchange ensure Shariah compliance ?

They employ services of premier third party Shariah advisory institutions to ensure Shariah compliance. Shariah board of this institutions screen and regularly monitors the stocks for Shariah compliance. Stocks are regularly added and deleted based on their Shariah compliance status.

Shariah board also advises on identification and purification of non Shariah compliant income generated by a Shariah compliant mutual fund. Non Shariah compliant income is donated in charity.

How is the performance of Shariah compliant fund ?

In long term (5 years or more) the Shariah compliant funds have outperformed or matched their category average.Thus you will not loose on returns by making investment in Shariah compliant fund.

Even Non-Muslims who do want to invest in ethical companies can consider these funds.

Equity Markets – Best Investment Option for Muslims

Posted on January 27, 2018

Equity Markets – Best Investment Option for Muslims

By Mr. Imtiaz Merchant
MD, Pragmatic Wealth Management Pvt Ltd

Muslims should take advantage of the boom witnessed in the Indian Equity markets and they should not get left behind in the economic growth that is being witnessed throughout the country and would remain for years to come. India is one of the fastest growing nations in the world with the GDP growing over 6 % for 2013-14 and expected to grow above 7 to 8 % in 2015 onwards.

In order to remain in the main stream of the economy and get equitable investment opportunity, Equity stock markets (The Islamic way) provides the most cost effective investment solution for the Muslims. Equity markets have proved that they are not only the most effective, transparent, liquid and conducive to small and big size investors as a means of investment, but history has also proved that it outperforms all other asset classes where return on investments is the parameter considered. In the long term equity market always goes up. Hence Muslims must invest in the equity market.

On the onset investment in equity markets is islamically a permissible activity since it is based on Musharaka (Partnership) and the profit is earned with risk of loss. However there are some issues for a Muslims to invest in equity markets (explained later).With Ulemas (Islamic scholar) guidance and approval it is now possible to overcome this, and in fact investment in equity markets the Islamic way is probably the best option available for the Muslims, that is not only regulated by the government body SEBI but also now approved by the Islamic Scholar.

Now first we look in to the inherent advantage investments in equities have over other forms of structured investments.

1. Fixed Interest (Riba) Based Investments

Fixed interest (Riba) based investments like the saving Bank deposit, Bank FDR; Postal savings, Debentures, Bonds etc are prohibited in Islam. Allah says in the Quran, ‘O those who believe, do not eat Riba (usury or interest) multiplied many times. And fear Allah, so that you may be successful. ’ (Al-Imran verse 130) Islam has discouraged fixed saving and withholding wealth but it has encouraged Business & Investments. ‘Profit should be earned only with the risk of losses, in equity investment the profit and loss is shared in proportion to the investments made. Thus, investment in equity market is in accordance to the Quran and Hadeeth injunctions.

2. Investment in Real Estate

Investment in Real estate/ properties, although permissible in Islam but it has certain disadvantages over equities. First, because of the unit size, it is not possible for every individual to buy property since the cost involved is huge whereas, one can invest in equity for an amount as low as Rs. One thousand and there is no upper limits. Secondly, property is subject to a lot of legal paper work and one has to go through a very cumbersome procedure to acquire properties. However, it is very easy to buy and sell shares by being a member of a SEBI registered broker. So buying and selling shares is as easy as snapping your fingers. Finally, there is often a threat of encroachment of the property which involves costly litigation. Equity shares have a big advantage here since the stocks purchased get directly deposited in the investor’s Demat account where it is in the safe custody and one can sell them whenever and as much as he wants to sell. If returns on investments as a parameter considered than historically it’s proved that returns earned in equity investments is superior to all the asset classes including the real estate.

3. Investments in Conventional Mutual Funds

Investments in Conventional Mutual Funds is not permissible from the view point that these mutual funds are not mandate to follow Shariah norms thus they do invest in stocks of ‘Haram’ or prohibited businesses like liquor, banks, hotels , entertainment, casino etc. that is strictly prohibited in Islam, hence profit earned from these mutual funds is impure and tainted. Investment done by mutual funds does not take in to account the companies with huge interest based debt and high interest earning. Over 45 % of the Indian equity market is not shariah compliant. Apart from this Mutual funds carry out days trading and derivatives trading which is not permitted in Islamic trading, hence conventional Mutual Funds are not shariah compliant instrument for Muslims to invest. However, Muslims can invest in Shariah compliant Mutual fund / Shariah compliant PMS / Shariah ETFs.

Advantage

One more point that goes in the favour of equity stock markets is the Capital gains tax advantage. There is no capital gains tax for long term investors i.e. if the investment is held for more than one year. And for the short term investments for less than a year, investors have to pay only 15 % percent tax on its gains. Muslims must take advantage of this benefit and invest in equities that would help them create wealth in the long term in the Shariah way.

The concerning part in the equities investment is the market risk and volatility. In order to overcome this and to optimize Halal return on investments, one needs to take guidance from Shariah based Equity Research advisors and Fund managers who can guide and advice them on what to buy and most importantly when to buy and sell. If this part is taken care of diligently, then equity investment is a best option for the Muslims.

ROLE OF SHARIAH SCHOLARS

Islam makes ‘Lawful Earning’ (Halal) mandatory, and in Islam, the spiritual and secular aspects are one and the same. This implies that Islam emphasizes the need to make a living by means that are permissible under it.
After many years of debate and discussions and looking into the need for Muslims to invest in equity markets as an alternate to bank and insurance Islamic scholars have permitted Muslims to invest in equity markets with certain strict stipulated conditions. With the help of computer technology and with so much of information available, now it is possible to screen the companies on Shariah norms,

Shariah scholars have imposed investment restriction and conditions and only upon fulfilling these conditions Muslims can invest in equity markets the Halal way.

The conditions laid down are as follows:

Restriction based on the type of Securities: Investment should only be done in Shariah compliant stocks as defined. A security trading in derivatives and day trading in stocks is strictly not permitted. Short selling is prohibited. Securities should only be sold after having its complete possession.

Restriction on Business Activity: No investment shall be made in stocks of the companies whose business activity is Prohibited (Haram)
Conventional interest based banks and other financial institutions like banks, NBFC, Insurance companies, stock brokers etc.
Alcoholic beverages like wine and other liquor related products and services.
Pork and non- Halal food products
Entertainment includes film production companies, cinema, Cable TV, music etc.

Restriction based on financial ratios: Apart from the above restriction on business activity, Islamic scholars from different part of the world have set certain financial criteria based on the need. In India Islamic Investment & Finance Board (IIFB) comprising of eminent scholars have approved the following financial criteria:
Interest bearing debt of the companies should not exceed 33 percent of its twelve months average market capitalization.
Cash plus interest bearing securities of the companies should not exceed 33 percent of its twelve months average market capitalization.
Trade receivable and other debtors of the companies to its twelve months average market capitalization should not exceed 33 percent.
Interest Income plus prohibited activity (impure) income of the companies to the company’s total income should not exceed 5 percent

Shariah Screening Process: Shariah screening is conducted for all the listed equities as prescribed and mandated by Shariah scholars. This process is done every quarterly. Those stocks that successfully pass the Shariah screens are thus called Shariah complaint universe. This process is done under the supervisor and audit of Shariah committee of Aalims and muftis.

Purification of Impure Income (purging): The income thus derived from trading and investments in shares do have some portion of impure or prohibited income. This income can be in form of interest received by the companies or some prohibited activity carried on by the company that earns impure or tainted income needs to be cleansed or purged. This is a compulsory process. The impure income consequently cleansed should be given as charity.

SHARIAH COMPLAINT STOCKS ON INDIAN STOCK EXCHANGE

At present, there are twenty one recognized stock exchanges in India. Amongst these the BSE and NSE are the largest one. The equity market capitalization of the companies listed on the BSE is Rs: 69 lac Crs / Approx US $ 1.20 trillion as of December 2013, making it the 4th largest stock exchange in Asia and the 8th largest in the world.
Indian stocks market is the fourth largest in terms of number of stocks listed and eight largest in terms of market capitalization. There are more than 5000 companies listed on Bombay stock exchange (BSE) but on evaluation it was found that 3400 companies are actively traded. Pragmatic Wealth Management P.ltd under supervision of its Shariah committee (IIFB) screened for Shariah stocks. As on December 2013 out of 3400 companies 633 companies are Shariah complaint, it roughly represent 19 percent of total traded stocks and in terms of market capitalization it is over 56 percent.

Mahram & Na Mahram

Posted on January 27, 2018

CONCEPT OF MAHRAM & NA MAHRAM IN ISLAM

WHO IS CONSIDERED TO BE MAHRAM FOR MUSLIM MEN:

Any woman, with whom a man has a relationship (of blood or foster) that precludes marriage, is considered a mahram to him. Mahram women include his mother, grandmother, daughter, granddaughter, sister, aunt, grandaunt, niece, grandniece, his father’s wife, his wife’s daughter, his mother-in-law, his foster mother , foster sisters, and any foster relatives that are similar to the above mentioned blood relatives.

IN SURAH NOOR , ALLAH RABB UL IZAT ORDERS MUSLIM MEN:

 “And marry not women whom your fathers married, except what has already passed; indeed it was shameful and most hateful, and an evil way. Forbidden to you (for marriage) are: your mothers, your daughters, your sisters, your brother’s daughters, your sister’s daughters, your foster mother who breastfed you, your foster sisters, your wives’ mothers, your stepdaughters under your guardianship, born of your wives to whom you have gone in -but there is no sin on you if you have not done so (to marry their daughters), the wives of your sons who spring from your loins, and two sisters in wedlock at the same time, except for what has already passed; verily Allah is Oft-Forgiving, Most Merciful. ”

 [4:22-23]

All the man’s female relatives mentioned in these verses are considered his mahrams, because it is unlawful (haram) for him to marry them, except the wife’s sister mentioned last, who is not a mahram because he can marry her if he divorces his wife, or if she dies.

MUSLIM MEN ORDERED TO LOWER THEIR GAZE Moreover for a Muslim man ,ALLAH ALMIGHTY also Orders him to lower his gaze.

In this context ALLAH ALMIGHTY Commands in the following verse of    SURAH NOOR: 24:30]

 Say to the believing men that they should lower their gaze and guard their modesty: that will make for greater purity for them: And Allah is well acquainted with all that they do. Here it is also to be kept in mind by all the believing MEN that such orders of “lowering the gaze” were first ordained onto them and in the very next verse same orders were prescribed onto the believing women.                                            But what happens commonly in the muslim societies today is that “PARENTS DO WARN THEIR DAUGHTERS NOT TO LOOK AT MALES BUT THEY FORGET TO TEACH THEIR SONS THAT THEY TOO ARE STRICTLY PROHIBITED BY ALLAH ALMIGHTY AND HOLY PROPHET (SAW) TO NOT STARE AND RAISE THEIR GAZE TOWARDS FEMALES.” REAL TRAUMA: And no doubt this is the crux of the matter why Muslim Societies Today are ruined and going onto the way of disaster.its parents duty indeed to tell their children both sons and daughters ,about the clear cut commands of ALLAH ALMIGHTY , so that there may arise no indecent , immoral and unethical situations as today we are seeing and unfortunately facing in our Islamic Societies. In fact if the children are being warned about these all commands from the very childhood and are bewared that in case of disobedience of such rule they will have to face ALLAH ALMIGHTY’S wrath & RASOOL ALLAH (SAW)’s anger in both the worlds , then from the earliest age, a sense of aversion from all such prohibited acts will develop in them .They will realize that from these things ALLAH ALMIGHTY WILL BE ANGRY at them and this concept will be so from in their minds that on reaching the age of maturity they will never ever INSHA ALLAH TALA indulge themselves in any indent , UNISLAMIC Acts .  

WHO IS CONSIDERED TO BE A MAHRAM FOR MUSLIM WOMEN:

24:31]

“And say to the believing women that they should lower their gaze and guard their modesty; that they should not display their beauty and ornaments except what (must ordinarily) appear thereof; that they should draw their veils over their bosoms and not display their beauty except to their husbands, their fathers, their husband’s fathers, their sons, their husbands’ sons, their brothers or their brothers’ sons, or their sisters’ sons, or their women, or the slaves whom their right hands possess, or male servants free of physical needs, or small children who have no sense of the shame of sex; and that they should not strike their feet in order to draw attention to their hidden ornaments. And O ye Believers! turn ye all together towards Allah, that ye may attain Bliss”.

 In this verse not only those who are MAHRAM for a Muslim women are mentioned but also ALLAH ALMIGHTY’S CLEAR CUT ORDERS about lowering their gaze is given.

MUSLIM WOMEN ORDERED TO TAKE HIJAB ALLAH ALMIGHTY ALSO COMMANDS Muslim women to veil themselves before going out or coming in front of any Na-Mahram , so that they not be molested and teased .its really ALLAH ALMIGHTY’S gift for all the Muslim women but we unluckily ,ponder over it not.

IN SURAH AHZAB ALLAH ALMIGHTY COMMANDS ABOUT THE BELIEVING WOMEN : 33:59]

 “O Prophet! Tell thy wives and daughters, and the believing women, that they should cast their outer garments over their persons (when abroad): that is most convenient, that they should be known (as such) and not molested. And Allah is Oft-Forgiving, Most Merciful”.

SHAKING HANDS WITH NA-MEHRAM

The traditions of certain societies have prevailed over Allah’s Shari’ah concerning this matter. Their wrong habits have overcome the rule of religion so much so that when one presents the rule of the Shari’ah to them, he is accused of being backward. Shaking the hand of one’s female cousins, or one’s uncles’ wives has become as easy as falling off a log in our societies, but if people considered seriously the dangers of this matter in the Shari’ah, they would not do it. The Prophet, sallallahu alayhe wa sallam, said, “It is better for one of you to be pierced by an iron needle in the head than to touch the hand of a woman that is not allowed to him.” (Tabarani) This sin is considered a fornication of the hand, as the Prophet, sallallahu alayhe wa sallam, said, “The eyes fornicate, and the hands fornicate, and the feet fornicate, and the intimate parts fornicate.” (Ahmad) Is there a person purer than Muhammad, sallallahu alayhe wa sallam? And in spite of that he said, “I do not shake women’s hands.” (Ahmad) He also said, “I do not touch women’s hands.” (Tabarani) Aisha, radhiallahu anha, said, “No by Allah, the Prophet’s hand never touched a woman’s hand, he used to accept their pledge of allegiance by [hearing their] words only.” (Muslim) Men who threaten to divorce their pious wives if they refuse to shake their brothers’ hands should fear Allah. It should also be known that wearing a glove or wrapping the hand with a cloth while shaking hands is not allowed either.

CONCLUSION:

MAY ALLAH ALMIGHTY HELP ALL MUSLIM UMMAH TO FOLLOW HIS COMMANDS COMPLETELY AND MAY WE ALL MUSLIMS GET COMPLETE UNDERSTANDING OF THESE WARNING WORDS OF ALLAH ALMIGHTY,SO THAT WE MAY BE SAVED FROM ALLAH ALMIGHTY’S ANGER AND RASOOL ALLAH (SAW)’ S ANNOYANCE IN BOTH THE WORLDS .AMEEN. 33:36]”

It is not fitting for a Believer, man or woman, when a matter has been decided by ALLAH and His Messenger to have any option about their decision: if any one disobeys ALLAH and His Messenger, he is indeed on a clearly wrong Path”. JAZAK ALLAH KHAIR