FIN624 GDB Spring 2021 Solution / Discussion Last Date: 26-05-2021
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Fin 624GDB Solution
Murabaha is type of sale in which seller expressly discloses cost of the product and profit which is being charged on that product. In Murabaha, if client defaults in making payment of price at due date, the price cannot be increased. That’s why Islamic banks cannot impose late payment penalty on their customers. In order to tackle this issue, customer of Islamic bank undertakes to pay a specific amount to Islamic bank as charity, if he defaults in making payment at due date.
Muslim jurists have difference of opinion about the legality of late payment penalty in financial transactions. Being a student of Islamic Modes of Financing (FIN624), what is your opinion about the legality of late payment penalty in financial transactions? Support your opinion with strong arguments by writing down the point of views of various Muslim jurists in this regard.
Fine or punishment implies in Islamic methods of banking the creaditors entitles the chief sum from the obligation given and any expansion is viewed as os denied riba ( premium ) that is settled law in islam with respect to the promissibility of the charge most of the contemporary Islamic law researcher are additionally miserable that is permissibal and they said that is likewise portray in Qurran in numerous sections and furthermore the prophet of Mhuammad SAW are additionally said that is permitted yet in islam there are foure way of thinking and each way of thinking have the diverse perspective on this and each school characterize distinctive meaning of riba