RESOLUTON No. 10 (10/2)


The Council of the Islamic Fiqh Academy, during its second session, held in
Jeddah (Kingdom of Saudi Arabia), from 10 to 16 Rabiul Thani 1406 H (22-28
December 1985).

Having reviewed  numerous studies on modern financial transactions;
After pondering over said studies and thoroughly discussions all aspects
thereof, the negative impact of such transactions on the international
economic order and stability became obvious, especially in relation to
Third world countries.

Having further deliberated  on the detrimental effects of the said effects
of the said system, because of its deviation from directives of the Holy
Book, which clearly prohibits Riba (usury), be it total or partial, and
commands us to repent from it, and permits us to recover only the principal
of loans, no more and no less, whether it is a big amount or a small one,
and warns us of a war waged by Allah and His Prophet against usurers:


First:Any increase or interest on a debt which has matured, in return for
an extension of the maturity date, in case the borrower is unable to pay
and increase (on interest) on the loan at the inception of its agreement,
are both forms of usury which is prohibited under Shari'a.

Second:The alternative, which guarantees the cash flow and financial
support for the commercial activity in a form acceptable to Islam, is to
trade with each other in conformity with Shari'a principles.

Third:The Academy invites Governments of Islamic countries to encourage the
financial institutions which operate in accordance iwth the principles of
Islamic Shari'a, and to enable them to operate in every Muslim country, so
that they may respond to the needs of Muslims and Muslim does not have to
live in contradiction between the demands of his faith and the realities of

Verily, Allah is All-Knowing. Unquote

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