ISLAMIC LAW OF CONTRACT-OFFER AND ACCEPTANCE IN THE SAME MEETING-SOME DISCUSSION.

Mithaq,Ahd and Aqd are THREE Arabic terms, which are used to designate contract and convey the meaning of their understanding and obligation. The contract is created when its essentials elements(arkan)and conditions(shurut) which the Lawgiver requires in these essential elements are found. An essential element (rukn),according to the generality of jurists, is that on which the existence of a thing depends regardless whether it is a part of its essence or lies outside it. The Hanfi jurists have restricted the essential elements(rukn) to that which is included its essence.(An introduction to the study of Islamic Law by Dr Hussain Hamid Hassan-S.A-IIUI-Pakistan).

Accordingly,  the jurists in general assert that --A contract has three elements(1)form(offer and acceptance/ Ijab-o-Qabul (2)the contracting parties and(3) subject matter.(Dr.Sanhuri, an eminent contemporary Muslim Jurist,has cited Seven Component elements in a contract).
The words concerning contract mean the instrument or means by which the intention of the contracting parties about the conclusion of the contract is expressed. This instrument or means is some times a word and some times a writing or an allusion, and some times an act.

Dr.Mansoori adds that:-
* It is a requirement of Islamic Law that acceptance should conform to offer in all its details and that the offer should be accepted in the same meeting
*The requirement of unity of session has been interpreted in different ways. To the modern jurists,whatever time is taken by the promisee to communicate his acceptance may be called continuance of the same meeting.
*Option of stipulation(Khiyar al-shart) is a mechanism provided by Islamic Law to overcome the problem caused by the restriction of unity of session. This option or right makes a contract non-binding for the party,which has reserved that right within a specific period.

Conditions necessary for Sigha(Form)
1. Conformity of the offer and acceptance on the same subject matter.   It is necessary that the acceptance must conform to the offer in all its details irrespective of whether such conformity is express or implied.

2. ISSUANCE OF THE OFFER AND ACCEPTANCE IN THE SAME SESSION OF CONTRACT"


Dr.Mansoori writes.
According to the jurists when an offer is made,it must be accepted in the same meeting. However, the promisee is allowed to think over the offer for some time. The basis of this viewpoint is a precept of the Holly Prophet(s.a.w.s)--The contracting parties have the right of option until separate"(Bukhari,Sahih,Kitab al Buyu,No.2112,p.417). Opinion is divided among scholars in regard to the interpretation of the phrase"until they separate"..

Commenting upon on the condition of unity of contract session the Federal Shariat Court has observed the following.
              A narrow interpretation of majlis(meeting) would mean that the offer of the promisor should be
accepted without any delay and without any delay and without giving the promisee any opportunity to think or consult someone in order to make up his mind. This may be practicable in small transactions but will fail in bigger transactions, which may require considerable inquiry. Thus, if an offer is made for sale or a factory, it will require inquiry into the title,power to sell, value of machinery, value of building, its liabilities, if any profitability etc. If the majlis is interpreted to mean single session, no one will consider purchasing a property
( See-Suo-Moto examination of Laws in the Contract Act, Islamabad,1986 p-8). The Court further noted.
               The language of the above-mentioned tradition demonstrates that it was only meant to denote the law of revocation. Thus if two parties agree to enter into a contract in one meeting,each of them shall have a right to retract from it till they separate. This appears to be the object. Its other object is that the offer must be taken seriously. To some modern scholars the word"meeting" is only  legal fiction in that whatever time is taken by the promisee to communicate his acceptance may be called the continuance of the same meeting.(Ref.as above) The FSC as such shown the matter related to "Khiyar al shart.

AN ATHAR/STATEMENT OF HADRAT IMAM ZAID(d 122.AH).

The narrator of a collection of traditions (Masnad al amam Zaid(r.a.t.a) a teacher of Imam Abu Hanifa-r.a.t.a-(d 150-A.H) had inquired from Imam Zaid--An al furqat bil abdan ou bil kalam-Either-- this separation is physical or of oral,the Imam said that this"separation"( of the contracting parties from each an other in a majlis/meeting) will be verbally. A person who is not conversant with the KALAM AL ARAB(Arabic language) will derive the meaning from the subject cited Hadith"the physical or bodily separation. Have yourselves not seen the commands of the Almighty Allah in the Holly Koran ?-And be ye not as those who separated and disputed after the clear proofs and come unto them(3:105).
These people were separated by way of talking(conduct) but physically they were at the same place.

Allah says in the Koran-Lo' As for those who sunder their religion and become schismatics, no concern at all hast thou with them(al Koran 6:160)--They have separated their Din(religion) orally.( See -Hadith No 433-Masnad al Amam Zaid-published by Shabbir Brother Urdu Bazar Lahore, Pakistan page-287 year of publication 2009).

According to his path (Minhaj) the Federal Shaiat Court Pakistan  follows( after Koran and Sun'nah) first the literature of Hanfi school of thought and secondly others to derive the Hukam(Command), and preferred statement is being followed in the process of Ijtihad. Hence the statement(qaul) of  Imam Zaid can be considered to follow on the subject.
             
Commenting upon the above verdict.Dr.Mansoori writes--
This right is known in Islamic Law as "option of stipulation"(khiyar al shart). The option of stipulation is the power by virtue of which one of the two contracting parties can give his final assent to the contract within a specified time. As such, if a purchaser, while giving his consent to the offer,retains the right to accept or reject it within three days( different opinion of the scholars is found), the contract will not be binding on him during that period. This means that Islamic Law provides a mechanism to overcome the problem caused by the restriction of unity of session.
 It is pertinent to point here that the requirement of unity of session does not apply of agency,making bequest and appointment of an executor( 'isa) for the property of minor.

3.The third condition"the offer survives till the acceptance proceeds" has been added by Dr Hussain Hamid Hassan.

LAPSE OF OFFER IN MODERN LAW.
The Contract Act of Pakistan does not fix any time of place during which or when the offer remains effective for the promisee to accord his acceptance. Section 5 provides that the acceptance to the proposal can be made before communication of the acceptance to the proposer by the promisee. Similarly, the acceptance can be revoked before its communication. Section 6 deals with th modes of revocation. Thus revocation can be affected:(1) through communication of a notice of revocation;
(2)by lapse of time prescribed for acceptance in the proposal for acceptance.
(3)by lapse of reasonable time.
(4)by failure of the acceptor to fulfil a condition precedent to acceptance;and
(5)by death or insanity of the proposer, when the fact of his death comes to the knowledge of the acceptor before his acceptance.(See contrct Act 1872, Section 5-6).

                The method can be followed by Islamic Law also since it facilitates the contract. Moreover, it is in the interest of the public. It goes without saying that realization of the public interest is an objective of the Shari,ah. Such methods may also be accommodated under the rule: Hardship causes giving of facility" and the rule"What is not prohibited is permitted".( Source-Islamic Law of Contracts and Business Transaction by Dr.Tahir Mansoori S.A-IIUI Pakistan).

CAUSES OF CANCELLATION OF OFFER(IJAB).
(1) Withdrawal of offer by the maker. (2)Refusal of the offer(3)Termination of the Majlis.(4)Destruction of the subject matter.  And

5-Death of a party or loss of its capacity.
The death of either party before acceptance causes the offer to lapse. Similarly, if there occurs a loss of capacity or the party becomes insolvent, the offer ceases to exist. The"Ibadiyyah" a sect of the Khawarij, however, hold that the offer once issued does not cease to exist due to death or loss of capacity but can be accepted by the other party to complete the contract. They also maintain that an acceptance can be made by survivors of a party to whom the offer was made. In other words rights can be inherited.

According to our opinion the Islamic Shari,ah has the observing capacity where the rule applies" What is not prohibited is permitted"  &"Hardships causes giving of facilities",as such the Fiqhi literature may be seen in the lights of the above information and modern interpretation but within the limits of Islamic Law.

My other blog.http://talibhaq.blogspot.com----http://talibhaq-readgood.blogspot.com---http://talib-hussainchahilcom.blogspot.com

ISLAMIC BANKING IN PAKISTAN-SOME ASPECTS

Following the recommendations of Council of  Islamic Ideology of Pakistan in his report of 1980, and under the supervision of State Bank of Pakistan(SBP),the transition of banking system of ADBP now renamed Zarai Taqiati Bank Ltd(ZTBL) conventional oriented to Riba free had been arranged.The lending onward 1984 had been shown as confined strictly under the banner of Islamic Banking System(IBS) but existing loan accounts of the said bank had not been changed from conventional to Islamic due to the reason that the documentation were arranged in these accounts on the interest-based system. The said system had been failed and reverted to the interest based system,with a change that accumulated interest(usury) is not being charged now from the borrower , but while calculating the amount of interest/markup the amount of loan and numbers of days are taken into account along with fixed rate of interest/markup,which varies, usually 9 to 14 percent. With some causes of reversion from IBS to interest- based system,one is,that the personnel of the bank had neither been trained especially with the knowledge of Islamic banking with its need and spirit, nor they were mentally prepared to face this important challenge,like to- days. Some lending reported to have been made under"Qard-i-Hasana) with 3 per cent service charges but to the influential persons and the loans were not utilized properly and had been devoured . This matter has not been taken seriously , because it is pending with FSC,as mentioned in the next para. We have chosen for here some paras from an article of Dr Shahid Hasan Siddiqui,written in 2008 and included in a book"Socio-economic challenges faced by Pakistan" published by International Institute of Islamic Economics-IIUI-Pakistan. These paras are reproduced with some comments where required.

DR.Shahid Hasan Saddiqui, Chairman & Chief Executive, Research of Islamic Banking & Finance, Karachi Pakistan,writes:-


ISLAMIC BANKING-THE PREVAILING STATUS.
The present system of Islamic banking in Pakistan was designed in pursuance of a meeting held on September 04,2001 under the Chairmanship of the than President Gen.Pervez Musharraf.The meeting was attended to among others by Governor State Bank of Pakistan (SBP),officials of Ministries of Finance & Law and some members of the Council of Islamic Ideology.It was decided in the meeting to shift to interest-free system in gradual and phased manner. This decision was not in conformity with the judgement dated June 14,2001 of Shariat Appellate Bench of Supreme Court of Pakistan(SAB) as far all practical purposes it visualized the continuation of interest-based banking system even after June 30,2002-the extended dead-line given by SAB for implementing its earlier judgement. This judgement was however,subsequently set aside in review appeal on June 24,2002.
COMMENTS.Maulana  Muhammad  Sadique Arkani, reveals that, SAB in May 2001, 
had fixed dead line for the transition to a Riba free economy as June 2002 and Justice Rtd Mufti Muhammad Taqi Usmani was not agreed to extend the date of this dead line,hence he was removed from his services and ad hoc members/ judges have been appointed namely(Honorables) Allama Khalid Mehmood and Dr.Rashid Ahmed Jullundhari"(P-114-115 of Islami Bankari aur Ulama,published by Al-afnan kKarachi. Pakistan).
It is worth mentioning to note here that Dr.Rashid Ahmed Jullundhari had supported the writings of Mr.Yaqub Shah and Maulana Phulwavi when he was Director of Institute of Islamic Culture,Lahore,wherein they have stated that the" Commercial interest prevailing in  the modern Banks" is not prohibited in the Islamic Shariah". Dr.Jullandhari is a prominent Islamic scholar and author. According to him"At present the so -called departments of Islmiyyat in our educational institutions are totally inadequate to promote understanding  of the Shari'ah...the paradox of the age is that among the masses those persons are popularly known as'Ulama who may be suitable as imams of mosques and effective as khateebs but who can never be described as the Ulama in the true of the word...it is matter of regret that the Legislative Assembly or Council has failed to perform its role in making Pakistan a welfare state.In fact,the jugglery of words and empty slogans of politicians led us nowhere." After  mentioning the current situation for the demand of Islamic Shariah,he write"this impression about the Shariah is a legacy of the age of decline in Muslim society and has no relevance to that Shariah which is known as the protector of the honor and dignity of human beings and whose objective is to promote the welfare of mankind and establish law and justice in the society."

While commenting about the problems of Islamic world he refers."A former Prime Minister of Malaysia was quoted as saying that his country is not like Saudi Arabia or Pakistan or Iran where the population is a 100 per cent or 98 per cent Muslim. In Malaysia non-Muslims account for almost half the population. Personal law problems of Muslims, like marriage and inheritance, are resolved through the application of the Shariah law,while a universally acceptable law prevails for collective matters. If sphere of the Shariah law is enlarged and this law is faced on the non-Muslim population, it will result in terrible bloodshed"
(Islamic Sharia and its application). The scholars of Al-azhar perhaps had the similar views regarding Riba.
Tajuddin Azhari, writes that " According to Alazhari Ulama(scholars of Al-azhar)the interest earned on Saving Bank Accounts is permissible, First Fataw on this subject had been delivered by Muhammad Abdah(d- 1904) which was published in the interpretation of verses-275 to 281 of Sura Albaqra regading Riba,by Allama Rashid Raza.The majority of Islamic world has not accepted this opinion(Ijtimai Ijtihad-IRI-IIUI-P-329). The opinions of the Islamic scholars have been compiled in"The Supreme Court's on Riba" published by the Shari'ah Academy IIUI Pakistan,where it has been proved that Riba in both commercial and consumption loans are prohibited in Islam.
However the matter is pending and new banks under the banner of Islamic banking have been established. The Islamic scholars are working with zeal  and zest on the subject, although they have different opinions, observing the freedom to write  and write within the limits of Islamic Shariah.

Dr.Siddiqui writes:-
The banks operating under the banner of Islamic banking in Pakistan have failed to eliminate the injustices of the interest-based banking system. These banks are in fact exploiting their depositors and are also not contributing to the achievement of the socio-economic objectives of Islamic economic system.The activities of these banks operating under the banner of Islamic banking are also having the same negative impact on the economy as is the case with conventional banks.

Is is important to note that bulk of financing by Islamic banks is being made on the basis of second-line fixed return techniques like Murabaha and Ijarah etc, and that too on the bench-marks of conventional banking system. In these modes of financing,Islamic banks to not accept any responsibility for the operational losses of the entrepreneur as they are guaranteed a fixed return notwithstanding that the sharing of the loss is the essence of Islamic system of banking.Further,the returns guaranteed to Islamic banks on their financing are also based on the bench-marks of interest-based banks in the country.

Comments.Dr.Ejaz Ahmed Samdani, says that the present  Islamic banking system is not complete and true Islamic banking system,but progress in this field is satisfactory".But we say that the said system is not child at the breast it should be true in all sense now. It is found that new avenues are not being explored, but there is vast scope,as" Income generating loans" may be advanced to the skilled persons in the rural areas. For cottage industries the loans can be advanced to the groups of women and men.

Dr.Siddiqui writes:-
The fact is that Islamic banks,in the present circumstances can not,even if they want to, eliminate the injustices melted out to depositors/investors by the interest-based banks.For payment of real positive rates of return to their depositors,the Islamic banks would have to enhance rate of return on their financing in addition to reducing their spreads. This enchantment would not be acceptable to many entrepreneurs availing finance from Islamic banks as alternate avenues are available to them for securing advances at lower rates of interest from conventional banks.

It is there,crystal clear that the policy adopted by SBP to allow the conventional and Islamic banks to run parallel to each other for a long period is not justified since it is giving bad name to the Islamic system notwithstanding that the fault lies with us and not with the system. Although the Shariah Supervisory committee(SSC) of SBP has not approved this parallel system of banking,the general impression amongst the people dealing with the Islamic banks but ignorant of the fact is that this system has been approved by the authorities concerned. It is therefore, essential that SSC should explain this position to the public.

Maulana Maududi had observed that Islamic financial system can neither grow nor can be firmly established if interest-based translations are not totally prohibited. Allowing interest-based banks to continue to operate for an indefinite period,in any case,is un-Islamic. The Holly Qur'an ordains"Enter into Islam totally"(2:208) and while prohibiting riba transactions,directs  Muslims to "give up what remains of your demand for riba"(2:278).

In the Musharakah mode of finance,both profit and losses are shared by the parties according to ratio of their respective capital. Shariah scholars have however,allowed that in Musharakah,profits can be shared in the mutually agreed ratio. This is creating serious distortions. In a large number of cases where Islamic banks provide financing on the basis of Musharaka, the ratio of profit to be shared is so manipulated that, in the final analysis,the profit earned by the Islamic banks is comparable with the corresponding interest income on advances earned by the conventional banks.

The SBP provides re-finance to Islamic banks on the basis of Musharakah but the ratio of profit sharing is so determined that the share of State Bank's income remains same as in the case of re-finance provided to interest-based banks. Similarly in the diminishing Musharakah modes of financing, the purchase of units by banks clients is not on the basis of market value of the property. Obviously,this is to keep the rate of return of Islamic banks in line with the rate of return of interest-based banks.

It is regretfully noted that Islamic banks have not opened a single branch in rural area and have not allowed Micro-finance and agricultural loans to land-less tenants(Harees) and small farmers. The behaviors of Islamic banks is not different from their counterparts. Their emphasis is on consumer finance scheme, which encourages people to live beyond their means. This scheme is not compatible with the spirit of Shariah. It is also having negative impact on the economy as discussed earlier.
Comments :- Above 70 percent of the population is engaged with agricultural sector directly or indirectly. The lending under "Bai Salam" can be made to the agricultural community. The bank may establish the procurement centers under his ownership or control which is allowed under Shariah laws,through which new employments can be made.

Maulana Maududi,while recounting the evils of interest-based banking,observed that a financier who advances money at fixed rate of profit is selfish as he is not concerned with the operational result of the business. He adds that the depositors of Islamic banks would hope to get unspecified but unlimited profit instead of fixed rate of interest. It is therefore, obvious that Muslim philosophers visualized large scale financing only on PLS basis and never on fixed rate of return(like in Murahaba and Ijara etc),which in any case is not dependent on the operational results of the entrepreneur.

Maulana Mufti Muhammad Shafi(Late),Grand Mufti of Pakistan, while referring to conventional banks observed:__"A person whose own worth is Rs.100,000/--engages in business employing Rs.1000,000. Of the hefty profit earned through such business, a small portion is paid to the bank by way of interest and the rest is pocketed by the businessman. The bank, in turn, distributes an even lesser amount to the depositors".

Mufti Shafi accordingly added that interest-based banks are"the instruments meant for sucking the blood of an entire community and pumping it into the veins of few capitalist." It is important to note that the total number of credit accounts of all conventional banks is 20.7 percent of total deposits accounts whereas in the case of Islamic banks,the total number of financing accounts is only 9.4 percent of total deposits accounts as on June,302007. The position is therefore,much worst in the case of Islamic banks as compared to interest-based banks,which were termed as blood suckers of the community.

In practice the conventional banks in Pakistan have been paying real negative rate of returns to their depositors and Islamic banks are no exception, notwithstanding that some of these banks have been enhancing their profitablity. As mentioned earlier, it was in 1993 that the then Governor, SBP had remarked" A banking system that gives a rate of returns to small savers which is negative in real terms, is exploitative one."

It is signifificant to note that Murabaha is the most popular instrument of finacing used by Islamic banks. In fact, Murabha is a particlar type of sale and not a mode of finacing in its, original sense. The Pakistan's sales tax regulations have been specifically amended for the purpose so that sales tax is not payable on the value-added price(amount of profit earned by the bank while"selling"goods in Murabaha transactions). This also implies that Murabaha financing can in fact be termed as a manipulation(Heela)just to escape from the label of interest and the net result of the transaction practically remains the same in both the systems.

The International magazine"Newsweek" reported that a Pakistani banker Shahid Hasan Siddiqui and other Muslims would like Islamic banking to remain true to Muslim values such as promotion of socio-economic justice and fair distribution of wealth. The banking can become Islamic, in the real sense of the word, only when it fully conforms to the Islamic values such as real risk sharing,promotion of socio-economic justice and fair distribution of wealth. This would be possible only if bulk of financing by Islamic banks is made on Musharakah basis(Profit and loss sharing) according to the ratio of capital invested in the business.

It is important to note that Muslim economists have all along been claiming that the elimination of interest and enforcement of the Islamic banking system would encourage savings and capital formation,ensure equitable distribution of income and wealth and establishing justice between the parties. It is also believed that the Islamic banking system within the framework of Islamic economic system would lead to optimum allocation of resources and economic stability. Now if the Islamic banks and entrepreneurs share the profit which corresponds to the prevailing interest rate, as is being presently done, these objectives are not likely to be achieved even if other financing policies of Islamic banks are properly defined to contribute to the achievement of the objectives of Islamic economic system.

RECOMMENDATIONS.

i.In view of the difficulties in allowing large scale financing on PLS basis,it is suggested that a Model Islamic Bank should be established. The proposed Model Bank should undertake all normal banking business and allow financing only on PLS basis according to true spirit of Shariah. This Model Bank would hopefully  pay much higher rate of returns to depositors as compared to the rate being paid be existing Islamic banks. The establishment of Model Islamic Bank would motivate other Islamic banks in Pakistan and abroad to enhance their share of financing on PLS basis. This proposal was also made before Shariah Appellate Bench of Supreme Court of Pakistan(SAB).

ii.Shariah scholars should announce in clear terms that the existing parallel system is un-Islamic and a time frame of say one year be given for complete switch over to interest-free banking system. It should be made clear that if this is not done, the support and authentication being given to the system would be publicly withdrawn. It is also suggested that the scholars concerned should accord their approval to the existing system of Islamic banking only when Musharakah financing is based on profit and loss sharing strictly on the basis of capitals employed and that the share of Musharaka in total financing is gradually enhanced according to a laid down time-frame so as to ensure that at least 50 percent of the new financing is made on the basis of Musharaka.

iii. Islamic banks must re-structure  their financing policies keeping in view the objectives of Islamic economic system. The emphasis should therefore,also be on micro-finance rather than on consumer finance.

iv.Islamic banks should open more branches in rural areas to cater the financing requirements of the local population including landless peasants(harees).

COMMENTS.Armstrong(b-1930) an American Astronaut says"One small step for a man,one giant leap for mankind". Dr. Shehzad Iqbal Sham,in Fikar-o-Nazar(July-September 2010)IRI-IIUI-Pakistan has suggested for Mudaraba loan. The points mentioned there in useful. Who will take the step? It is oft told story that the competent authorities should take necessary action on the subject.

v.The Islamic banks must share their profit with the depositors in the real sense.

My other blog; talibhaq.blogspot.comtalibhaq.blogspot.com

Actually there is no money except the real-Some details(2)

It relates to our old post on the subject cited above.
The straightforward author of the OZAN-I-SHAR'IAH,Mufti Muhammad Shafi,writes that the magazine under discussion was published firstly in 1361 A.H,but now its third addition is being revised,in the light of a magazine "Almisbah al munir"written in 1148 AH.Its author Sheikh Muhammad Qaim Sindhi was Hanfi and Qadri. The said author,his Institution and successors have worked"very good"for us(Now this magazine Ozan-i-Shariah will be referred here as B-1).An other book "Door-i-hazar main Ozan-i Shara'iah written by Molana Abdul Majid Raees-published by Maktaba Asadya Karachi Pakistan will be referred here as  B-2.Its author has claimed as interpreter of the B-1.The B-1 was published in February-2008 whereas B-2 has no date. Our comments regarding some entries in these are as under.
At page-17 of B-1,the honorable author has written that he has taken 70 and 100 grains of barley each account separately, weighed personally(and through some Goldsmiths)with due care.In both the accounts the grains of barley were average in mass.This practice was repeated for some times.These barely-corns have been weighed side by side comparing with the prevalent weight- Masha.....The barley-corns have been weighed with different methods and concluded that the70 grains of barley having average mass are equal to 3 masha and 1 ratti(which is Sharai weight of Dirham and now3.0618 grams) and 100 barley -corns equal of one mithqal(Dinar) say 4.5 masha now equal to 4.374 grams.
       It is  mentioned here that the history of the barley and coins like Dinar/Mithqal,Dirham and Daniq is very old and pre-Islamic.At the advent of Islam the weights/measures were known.The barley grains which were being grown at that time are not grown now.As such the determination and fixation of weight of Dinar/dirham with reference to barley grains now seems to be defective. Now 16 varieties of barley are reported, out of which 4 to 5 are ancient one.According to the record of Muqaddimah of Ibn Khaldun,the Shariah Dinar/mithqal is equal to 72 barley-corns and weight of Dirham is derived from this statement as equal to 5o and two fifth barley-corns.
At the end of B-1, a chart has been arranged wherein the weight of Dirham is written as 3.0618 grams but weight of Daniq is written as 874.8 mg. Hence a Dirham is equal to 6 daniq,as such its weight is calculated as 5.248 grams which needs to be corrected.The weight of a Dirham(in the light of the statement of)
 muqaddimah of Ibn Khaldon is calculated now equal to 3.00 grams.The weight of a Mithqal/Dinar is written in B-1 as 4.374 grams, whereas from the entry  of maqadama referred to above it is derived as 4.25 grams.(Regarding the weights of Dinar/mithqal and Dirham Ibn Khaldun quoted the consences(Ijma). In B-1 the
weight of Sharai Dirham is written as 14 carat but-nil-daniq,whereas it is of 6 daniq(see Kitab al amwal and Ihkami Sultania referred to above),which needs necessary revision and correction. Against Dinar o5 Daniqs have been written,this entry also needs correction.
All other entries of B1&2 regarding weights/measures, like Ratal,Awaqya,Sa',Nisab of Zakah in Gold and Silver differs,due to the difference in school of thoughts.It seems, that the books like Kitab -al- Amwal by Abu Abayd-d 224 AH(which is considered the early source adjacent to the Sadar-i-Islam--Advent of Islam), & Ihkam-i-Sultanya by Al-Mawardi have not been consulted while writing the B-1 & 2.
CONCLUSION.
1. The difference in weight of Dinar/mithqal & Dirham is perhaps due to the difference in mass of different varieties and productions of barley-corns.
2.The weight(Daniq)has not been taken into account and process as per records  of the B-1and 2.
3.A few books have been consulted on the subject and important differences have been found among these.The writer of the Tafseer-i-Naeemi writes that the weight of a Dinar/Mithqal is equal to 24 carats and 1 carat is equal to 3 barley-corns ,hence it is equal to 72 grains.The writer of Lughat ul Quran has not elaborated it.
IMPORTANT POINT.The translator of Dr. Wahaba al-Zahail's book Hakim-Ullah gives a comprehensive foot note at page-42 of Massail Zakah O Sadqat,managed and published by an important Islamic Institution-IRI-Islamabd.The note is translated in English version as under:-
(The Nisab of Zakah in Gold i.e taxable quantity of Gold is 20 mithqal or 20 Dinars)According to Ahnaf a mithqal is equal to 5 grams but according to jamhoor(masses-majority of the Muslims)its weight is 3.60grams.The Faisal Islamic Bank declared its weight 4.457 grams and it is reasonable average weight OR it is equal to 4.25grams.And listen near the Hanabla a Dinar is less than a mithqal hence the Nisab of zakah according to Hanabla is calculated as 25-2/7+1/9 Dinars.At next page47 while mentioning the Nisab of Zakah in Silver he writes that 200 Dirhams were equal to 7 Mithqals, a Dinar was equal to 20 carats whereas a carat was equal to 5 barley-corns.Hence Dirham Shariah is equal to 70 barley-corns.As such between mithqal and Dinar equality is found.According to Ahnaf the weight of Dirham Shariah is3.50grams and according to Jamhhor it is of 3.208grams.The Arabic Dirham is equal to 2.975 grams.(The Nisab of Zakah, in Silver was mentioned,according to Ahnaf 200 Dirhams--approximately equal too 700grams and according to Jamhoor its weight is 642 grams.
Now some countries/Institutions struck the Gold Dinar and Silver Dirham,the details of which can be seen in print and electronic medias to know the current practice.

BJECTIVES OF THIS DISCUSSION


1.To state that:- Before and at the advent of Islam the business transactions were being made through Gold Dinars and Silver Dirhams (in shape of bullion and coins).The  same practice has been accepted in  Islam,and further the Gold Dinar/Silver Dirhams had been struck.The 7 Mithqals/Dinars were equal to 10 Dirhams(one Dirham=6 Daniqs).Afterward the fulus(fils) had been struck and used for minor translations.From the above record the Asool( first principle)is derived that the Islamic monetary system accepted such money which has intrinsic value, and there is no room for paper money or like it.Hence recourse is imperative. Most of the Islamic scholars in the past has seen and accepted this type of  money(except gold and silver and fulus for minor transactions) with abomination but following the "Objectives of Shari'ah".(It will be discussed briefly in the next note).
NOW THE KINDS OF MONEY ARE TREATED AS UNDER, AND THE MUSLIM SCHOLARS HAVE ACCEPTED THESE.  
NECESSARY GLOSSARY FOR USEFUL CONCEPTS TERM/MEANING:
.A. FULL BODIED MONEY
 MONEY WHOSE METALLIC CONTENTS HAD A VALUE IN NON-MONETARY USES(SUCH AS IN MAKING 
ORNAMENTS)EQUAL TO THEIR VALUE IN EXCHANGE.
B. COMMODITY STANDARD. A MONEY SYSTEM THAT IS BASED ON FULL BODIED MONEY. THE FAMOUS GOLD STANDARD WAS AN EXAMPLE OF COMMODITY STANDARD.

C. REPRESENTATIVE FULL BODIED MONEY. A SYSTEM OF TOKEN MONEY THAT HAVE LITTLE INTRINSIC VALUE BUT THAT IS BACKED(CAN BE CONVERTED INTO)A COMMODITY SUCH AS GOLD AND SILVER. THE TOKENS MAY OR MAY BE METALLIC. THE US AND SOME OTHER COUNTRIES USED THIS SYSTEM UNTIL THE MIDDLE OF THE TWENTIETH CENTURY, WHEN GOLD AND SILVER CERTIFICATES WERE ISSUED BY US TREASURY WHICH REPRESENTED THE VALUE OF UNDERLYING METAL AS FIXED BY THE GOVERNMENT.

D. FIAT MONEY: A MONEY THAT HAS LITTLE COMMODITY VALUE COMPARED TO ITS VALUE IN EXCHANGE. THIS MONEY IS ISSUED BY GOVERNMENT,CENTRAL BANK AND OTHER FINANCIAL INSTITUTIONS.

E. FIDUCIARY MONEY SYSTEM :A SYSTEM BASED ON FIAT MONEY.

GOLD STANDARD: A MONEY SYSTEM PREVALENT IN MANY COUNTRIES UNTIL THE EARLY 1970S BUT IS NOW DISCONTINUED UNDER WHICH THE UNITS OF THE CURRENCY OF COUNTRY WERE CONVERTIBLE INTO FIXED AMOUNTS OF GOLD:FIXED PARITY A UNIT OF CURRENCY-DEFINED AND MAINTAINED BY THE CENTRAL BANK AND BACKED BY THE SOVEREIGN GUARANTEE. (CONT"D-ISLAMIC MONETARY SYSTEM )
2.As far as the weight of Gold Dinar and Silver Dirham is concerned'"Various accounts are given of their weights.Some Institution have minted these coins now .The Reasonable and approved weights of these coins, by the authorized Islamic scholars may be followed.
My Other blog. talibhaq.blogspot.com

Actually there is no money except the real-Some details.

In pre-Islamic days Roman and Persian money was in current in al-Hajaz,together with a few Himyarite silver coins bearing the Attic owl.The same was accepted at the advent of Islam and up-to the days of Hadrat Abu Bakar Sadiq(RATA). Hadrat Muhammad(peace be upon him) said"Do not sell gold for gold except when it is like for like,nor inappropriate one through the other.nor sell silver for silver except like for like,nor misappropriate one through the other,nor sell thing that are absent for those that re present".(Subul-al salam).According to(Al mawardi-d-1058CE) the writer of "Ahkam-i-Sultania" during the days of Hadrat Umar(RATA)the coin of dirham was struck weighing 06 Daniq.and wight of 7 mithqals was equal to the wight of 10 dirhams". Abu Ubayd al-Qasim b.Salam(d224 AH)writes under point1617 of his Kitabal Amwal"In Ummayid period,when it was decided to design a new Dirahams,full consideration was given to their consequences and effects.....They had struck the coin,but it was creating the problems for the collection of Zakah.....So they decided to redesign it between these two(full dirham'and Tabriyya) Dirahms,in such form,which might neither reduce the proceeds of Zakah nor might cause loss to the owners.More over,(they considered that) this design should be in accordance with the Nisab of Zakah during the age of the Prophet(peace be upon him).The people,before this,used to pay Zakah in two parts;separately from big and small Di hams.When the Ummayad rulers decided to form a new dirham,they wighed both the previous ones and found the bigger equal to eight Daniq and the smaller equal to four Daniqs. They designed a medium size dirham;equal to six Daniqs.Then,they weighed it with Mithqal,because it always remained a determined wight. They took such ten Dirhams that one of these was equal to six Daniqs. Then they weighed these (Dirhams)with Mithqal and found them exactly seven Mithqals.Thus,these Dirhams gained three characteristics(i) These(ten Dirhams) became equal to seven(Mithqals)in weight(ii)A balance was established between the bigger Dirhams and smaller one(iii) Complete conformity with the Sunnah of the Prophet(Peace be upon him)without any change.
Afterwards,these wights of Dirham were in practice, and the Muslim community agreed upon it,that is to say fully weighed Dirham is equal to six Daniqs,and if its weight is changed,then it will be said that this Dirham is less or more in weight,So,the people,in the payment of their
zakah are following the same path,which is oriented by the guiding principle of the Prophet hood,they neither exceed it nor deviate from it.Same will be the matters concerning buying and selling and blood-money for those people who keep the silver coins....Even before this(designing
Under point1599 Abu Ubayd said."I looked into   Umar's tradition and found that he equalized forty Dirhams to four Dinars,because this was the basic rule of exchange that one Dinar is equal to ten Dirham.
According to the Encyclopedia of Islam there we two monetary systems were prevalent(i)dhahab-Gold(ii)Waraq-Silver. Hadrat Imam Malik(d179AH) firstly had used the terms- Ehal al dhahab-People of gold.and EhalalWaraq- the people of Silver.
Ibn Khaldun writes that-7 Dianars are equal to 10 Dirahms and the weight of Shari'ah Diar is equal to 72 grains of barley, but the other books have different information as Dirham is equal to 70 grains of barley,Mithqal is equal to 100 grains of barley whereas one grain of barley is equal to 3 grains of rice etc.
(See-Fateh al Qadir Vol-1 Page-523,dar Mukhtar,Behar al-Raiq etc--and -Idara Al Ma'arif Karachi Pakistan'sOZAN-I-SHARI'AH Urdu version.
Hitti write with the reference of Islamic Scholars Tabari,Baladhuri and Yaqut that"A number of Gold and silver piece were struck before the time of Abd-al-Malik,but those were imitations of Byzantine and Persian type. Abd-alMalik struck at Damascus,in 695,the first gold Dinar and sidirhams which were purely Arabic.It is said that Hadrat Umar(RATA) struck the Dirham Baghalia in 18AH.

It is concluded from the above information and traditions that the Islamic monetary system is based on Gold and Silver and  money like these.

Mt other blog- talibhaq.blogspot.com

MONEY CREATION

‎The history of"money creation"refers back to the famous story of the gold smiths of medieval England. The people used to deposit their gold coins with them in trust,and they used to issue a receipt to the depositors. In order to simplify the process,the goldsmiths started issuing"bearer
'receipts which gradually took the place of gold coins and the people started using them in settlement of their liabilities. When these receipts gained wide acceptability in the market,only a small fraction of the depositors or bearers eve come to the goldsmiths to demand actual gold. At this point the goldsmiths began lending out some of the deposited gold secretly and thus started earning interest on these loans. After some time they discovered that they could print more money(i.e paper gold deposit certificates)than actually deposited with them and that they could loan out this extra money on interest. They acted accordingly and this was the birth of "Money Creation" or"Fractional reserve lending" which means to loan out more money than one has as a reserve for deposits. In this way these goldsmiths,after becoming more confident,started decreasing the reserve requirement and increasing the percentage of their self-created credit,and used to loan out four,five,even ten times more gold certificates than they had in their safe rooms.


Initially,it was abuse of trust and a sheer fraud on the part of the goldsmiths not warranted by any norm of equity,justice and honesty. It was a form of forgery and usurpation of the power of the sovereign authority to issue money.But over time,this fraudulent practice( like other practices and evils penetrated in the society)turned into the fashionable standard practice of the modern banks under the "fractional reserve" system. How the money changers and bankers have succeeded in legalizing the" creation of money "by the private banks,in spite of the strong opposition from several rulers in England and USA,and how the Rothschild acquired financial master over the whole of Europe and the Rockefeller over the whole of America is a long story(the related books on the subjected can be seen )now lost in the mist of numerous theories developed to support the concept of" money creation" by the private banks.But the net result is that the modern banks are creating money out of nothing They are allowed to advance loans in the amounts ten times more than their deposits. The coins and the notes issued by the government as a genuine and debt-free money have now a very insignificant proportion in the total money in circulation,most of which is artificial money created by advances made by the banks The proportion of real money issued by the governments has been constantly declining in most of the countries,while the proportion of the artificial money created by the banks out of nothing is ever-increasing.The spiral of loans built upon loans is now the major part of the money supply. Taking the example of UK according to the statistics of 1997 the total money stock in the country was 680 billion pounds,out of which only 25 billion pounds were issued by the government in the form of coins and notes. All the rest 655 billion pounds were created by the banks.It means that the original debt-free money remained only 3.6% of the whole money supply while 96.4% is nothing but a bubble created by the banks.(Derived from"the Historic judgement on interest"-Maktaba Ma'ariful Quran Karachi Pakistan) 
My Other blog.talibhaq.blogspot.com