Jāiz Bank involving in Usury? By: Shaykh Habeeblai Jumah

Bismillāh wa sollātu was-Salāmu ‘Alā Rasūlillāh.

I recently came across a piece of writing transcribed from some viral audio clips by a brother from Ilorin, who erroneously claimed that some financial transactions of the Nigeria first non-interest bank (Jāiz) are not Sharī‘ah complaint. The brother, in the transcribed audio, claimed Jāiz Bank consumes riba, and that many of its products, especially Murābaḥa-related products, are not Sharī’ah compliant.

This is my summarized response to the brother’s flippant claims:

Firstly: Islam enjoins us, as Muslims, to be mindful of our speeches; especially, those related to matters of ḥalāl and ḥarām. We do not make ḥalāl what is haram, neither must we rule as harām what Allāh has made ḥalāl, because this is deemed heinous in Islam. Allah says: «And do not say about what your tongues assert of untruth, “This is lawful and this is unlawful,” to invent falsehood about Allah. Indeed, those who invent falsehood about Allah will not succeed» (Q:16:116). As Muslims, we do not make rulings on matters we have little or no information about, of which the resultant effect will be tantamount to spreading ignorance and misinformation among the Muslims.

Secondly: The Islamic financial system is premised on the unswerving belief that Ribā, speculation, uncertainty and other economic vices and unethical practices are prohibited by Islam, and on the need to create Sharī’ah complaint substitutes that will satisfy both religious and socio-economic needs of the Muslims. Consequent to this, the presumption is that all Islamic financial instruments and products in Islamic banks and related financial institutions would have been certified, vetted and endorsed, not only by the Sharī’ah Supervisory Board of the institution, but would also be in harmony with the international Sharī’ah standards on Islamic finance; which are in the real sense, a reflection of the Islamic financial laws and regulations contained in the classical rulings of commercial transactions in the Islamic jurisprudence. For someone to have sat lazily on his sofa and couch making unnecessary and unfounded criticism of these scholarly efforts, it shows such person is -at least- ignorant of the concept, and ill-informed about the operational principles of the system, and oblivious to the standard Islamic juristic rulings regulating financial transactions. Or for his own reasons, holds a mischievous mindset towards the development of Muslims’ schemes on worldly matters.

Thirdly: it should be noted that every Islamic financial product(s) rolled out by Jāiz Bank and any other Islamic banks operational in Nigeria must have been duly vetted and endorsed by the CBN’s Financial Regulation Advisory Council of Experts (FRACE) consisting majorly of Sharī’ah scholars and well-read certified personalities in matters of Sharī’ah financial transaction. FRACE will study every single transaction and product to be designed for the CBN on the basis of the Sharī’ah laid-down standards, and the regulatory norms applicable globally. On its part, for every bank to comply with the CBN’s laid-down regulations, the bank’s Advisory Council of experts (ACE), which must also majorly constitute of Sharī’ah scholars and well-read certified personalities in matters of Sharī’ah financial transaction, will supervise the banks’ operational dealings, in order to forestall the risks of the bank that might not be Sharī’ah compliant. Also, in order to secure the bank’s Sharī’ah compliance obligation, every branch must also have an internal audit unit, which is a board of Sharī’ah Auditors made up of Sharī’ah scholars and well-read certified personalities in matters of Sharī’ah financial transaction, in order to make sure that every single transaction is concluded on the best practices that are Sharī’ah compliant, as opined by Muslim scholars the different classical schools of Islamic jurisprudence. One now wonders, how can a single person with no traceable academic struggles, operational expertise, and sound independent jurisprudential skills, defiantly prefer his myopic views on some issues to the opinions of hundreds of certified global Islamic scholars with verifiable decade-long academic expertise and operational experiences in matters of Islamic finance?

Fourthly: Islamic financial institutions are riba-unfriendly sectors, based on the axiomatic belief of the illegality of consuming Riba. Nevertheless, while there are many issues of ribā unanimously agreed upon by Muslim scholars, without any known controversy; there are tens of other issues with an age-long scholarly disagreement on its inclusive or otherwise in the general juristic concept of riba. This latter section of the ribawī transactions are open to juristic debate, of which no one has the intellectual authority to exclusively adjudge his view as the only-correct opinion. So, if a scholar opines that there is a riba structure in a particular product, while the other disagrees; there is no religious provision that pronounces either of the scholarly opinion as sacrosanct, such that it would be forced on the other dissenting scholar. The legal maxim applicable here is that: “an ijtihād (scholarly effort) cannot be overruled by another commensurate ijtihād”. During the nascent development of the modern Islamic banking in the late 70’s, Islamic jurists debated the legality of the modern Murābaḥa instrument in the banking institutions; while some opined it is not allowed, the majority of the contemporary scholars of Sharī’ah opined it is legal, without any reservation. This reiterates the fact that the brother’s struggle to convince some of his audience, by reading from some Saudi scholars, on the impermissibility of some Murābaḥa contracts, does not hold any weight; because the major message from the verdict is that some scholars disagree with the instrument, based on their scholarly ijtihād. And our response is that Jāiz scholars also have the scholarly expertise and competence to adjudge on the matter, and they did not subscribe to the opinions being held in the verdicts cited by the brother.

Fifthly: I want to advise the Muslim Ummah, especially those reading this short response, that in as much as we are convinced that we must be well enlightened on matters related to our religion, we must also be mindful of not listening to anyone, or reading from them or even sharing any information about Islam, except from those who have the requisite competence in the field under discussion. We should be cognizant of the fact that not everybody who holds a general talk in our local masjids is actually competent of being consulted on complex religious matters, especially those ones that require academic discipline and expertise. Hence, the blame of religious misrepresentation and misinformation will be bore, not only on the original author of the misinformation, but also by the reckless sharer and disseminator.

Lastly, the brother with the viral and later transcribed audio, accusing Jāiz bank for the consumption of usury, was utterly wrong in his accusation due to his naïve and myopic intellectual and operational expertise in the matters he was adjudging. Hence, he should not be taken so seriously. I am however charging Jāiz bank to be watchful of its set goals of non-interest banking activities in Nigeria, to pick advices where necessary from public opinions regarding their products, and to improve their customers services and invest more in public awareness outfits, for an increased public trust and education on its Islamic banking services.

Subhānaka Allahumma wa bihamdik Ashadu An lāilāh illa Anta Astagfiruka wā atūbu Ilayk

Habeeblai Abiodun Jumah, CSAA (AAOIFI)
Lagos,Sunday 19\Safar\ 1443: 26\ September, 2021