I have been reading about leasing schemes for a long time. For the first time in July, I read about Faisal Bank’s “Islamic Car Financing”. They claimed leasing using principles of “Ijara” and “Murabaha”. I wanted to ask, who can confirm whether this scheme is islamic or not? Should we ask Justice Taqi Usmani?
Answer
Please do ask Mawlana Taqi Usmani about it. He is a genuine scholar, and has done good research in the area of Islamic financing. However, I do beg to disagree with some of his views, where he allows Murabaha as a mode of financing. I think that Murabaha, the way it is practised in the contemporary Muslim financial institutions is still riba, even after following all the measures suggested by Mawlana Usmani and other scholars.
My understanding about this issues is this: If you are charging a higher price for a commodity simply because the payment is delayed, it is nothing but riba. Mawlana Usmani doesn’t believe it to be so. They are convinced about the permissibility of the higher price for delayed payment, provided a real commodity is involved and provided the increment in price can’t be further increased, because of default in the deadline of payment.
As for Ijara, I believe that it is an acceptable arrangement to Islam provided the lessor takes the responsibility of all risks to the asset that cannot be directly attributable to negligence or willful wrongdoing of the lessee.