Islamic Finance Division
In light of the growing potential of Islamic Banking, Pakistan Kuwait Investment Company (PKIC) decided to establish a dedicated Islamic Finance Division (IFD). PKIC has successfully obtained permission from State Bank of Pakistan to commence shariah compliant business operations. PKIC – IFD is equipped with a team of qualified professionals who have developed a wide range of financial products and services in accordance with Shariah principles to serve its valued customers.
CONTACT DETAIL OF SHARIAH COMPLIANCE FUNCTION
Rizwan Ahmed – Manager Shariah Compliance Function
Email ID: rizwan.ahmed@pkic.com
Phone No. (021) 111 611 611 Ext.293
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Certificate Of Islamic Investment
Certificate of Islamic Investment (COII) is a fixed term investment designed to offer a competitive yield to investors. Pakistan Kuwait Investment Company (Private) Limited (PKIC) under its Islamic Finance Division (IFD) is offering COII for all corporate customers. COII is designed for short, medium and long-term investment opportunities, providing a reasonable avenue for savings with flexible encashment options and affordable denominations for investors.
Frequently Asked Questions
What is Meant By Riba?
The word “Riba” means excess, increase or addition, which correctly interpreted according to Shariah terminology, implies any excess compensation without due consideration (consideration does not include time value of money). This definition of Riba is derived from the Quran and is unanimously accepted by all Islamic scholars.
The meaning of Riba has been clarified in the following verses of Quran (Surah Al Baqarah 2:278-9)
“O those who believe; fear Allah and give up what still remains of the Riba if you are believers. But if you do not do so, then be warned of war from Allah and His Messenger. If you repent even now, you have the right of the return of your principal; neither will you do wrong nor will you be wronged.”
What is interest? Is there any difference between interest and Riba?
The origination of term interest dates back to 17th century with the emergence of banking system at global level. Interest means giving and/or taking of any excess amount in exchange of a loan or on debt. Hence, it carries the same meaning/value as that of Riba as defined in the previous question. Further, it is narrated that “the loan that draws interest is Riba”.
There is consensus among the Muslim scholars of all the fiqhs that interest is Riba in all its forms and manifestations.
What are the different kinds of Riba?
1. Riba-An-Nasiyah / Riba-Al-Quran
2. Riba-Al-Fadl / Riba-Al-Hadees
1. Riba An Nasiyah/Riba Al-Quran: In the Holy Quran, Allah (SWT) says in Sura Al-Baqarah (2-279): “ …..And if you repent, yours is your principal”
It is reported by Harith ibe Abi Usamah in his Musnad that Sayyidna Ali Radi-Allahu Anhu reportedly referred that the Holy Prophet said:
“Every loan that derives a benefit (to the lender) is riba”6.
Example of Riba-al-Nasiyah/Interest: If Mr. A lends Rs.100 to Mr. B (a borrower) with a condition that Mr. B shall return him Rs.110 after one month. In this case, the extra amount of Rs. 10 is Riba or Interest.
2. Riba-al-Fadl: Abu Said al Khudri Radi-Allahu anhu narrated that Holy Prophet (Peace be upon him) said:
it may be noted that economically speaking it would be irrational to exchange one kilogram of wheat with one and a half kilogram of wheat in a spot exchange. Therefore, some fuqaha have pointed out that Riba-al- Fadl has been prohibited because if it was left un-prohibited it could be used as a subterfuge for getting Riba-al-Nasiyah. Of the six commodities specified in the hadith, two (gold and silver) unmistakably represent commodity money used at that time. One of the basic characteristics of gold and silver is that they are monetary commodities. As a matter of fact, each of the six commodities mentioned in the hadith has been used as a medium of exchange at some time or the other.
During the dark ages, only the first form (Riba An Nasiyah) was considered to be Riba. However, the Holy Prophet (peace be upon him) also classified the second form (Riba-al-Fadl) also as Riba
Does interest/Riba is related only to consumption loans or it applies to commercial loans also?
The interest is prohibited whether it is consumption loan (loan for meeting day to day human needs) or commercial loan (loan for business purpose). There are quite a number of ahadith which clarify that in the days of Holy prophet, people not only borrowed for consumption purposes but also for productive purposes. A few of the ahadith are given as follows for reference:
(i) Ibn Saad has reported Hazrat Umar ( Radi-Allahu anhu), wanted to send a trade caravan to Syriya. He borrowed four thousand dirhams from Sayyidna Abdurrahman ibn Awaf, Radi-Allahu anhu for this purpose.
(ii) Ibn Jarrir has reported that Hind, daughter of Utbah and wife of Abu Sufyan borrowed four thousand dirhams from Sayyidna Umar, Radi-Allahu anhu, for the purpose of her trade. She invested this money in purchasing goods and selling them in the market of the tribe of Kalb.
This is an ample testimony that the commercial loan was in practice when Quranic verses on Riba were revealed and the term Riba covers not only consumption loan but also the commercial loan.