Arbun and Cash settlement : Cash sٍٍettlement and Arbun

Fatawa Question

[Question One] : As Salamu Alaykum, Our planned Shari’ah Compliant Fund intends to make use of Arbun and send us the attached documentation. I read it and was unsure about the choice offered for cash settlement as an alternative to physical delivery. Would cash settlement be agreeable for you ? other details are not needed for review as the current document is a draft only. Best regards, [Question Two] : Dear Brother Monzer, As Salamu Alaykum, 1) In general I have the same understanding to use Wakalah to achieve cash settlement. In this case the contract is meant to be used for Saudi-Arabia, where actual ownership transfer to the foreigner is not allowed. Could this alter your view in terms of the rules of necessity ? 2) I am aware of the AAOIFI argument regarding shares only for Salam ; Arbun has not been much discussed in the Shari’ah / accounting standards of AAOIFI. Do you see it in analogy or is this mentioned specifically and I cannot recall it ? I heard previously, that the shares owned at the time of Arbun could be sold after the contract. Is that agreeable to you ? further Arbun for shares is accepted by many scholars and I came across it frequently from other banks. Best regards and thanks, Michael

Fatwa

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Publication Date

2009-05-11

Main Subjects

Financial and Accounting Sciences
Religion
Islamic Studies

Topics

• Islamic jurisprudence
• Sales
• Prices
• Cash flow
• Agency(Law)
• Down payments
• Payments

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-733927

• APA
• MLA
• AMA