Growing up in Lahore, Pakistan, I was fortunate to receive a great Islamic education. From the age of nine until I turned 15, I was lucky to study with Maulana Askari, a kind and knowledgeable Quran and Islamic teacher. He taught me everything from how to recite the Qur’an properly to understanding the five pillars of Islam. He also taught me about prayer, fasting, and how to live with good manners and ethics, known as Akhlaq. Even today, I respect Maulana Askari deeply—he holds a place in my heart right next to my parents and a few of my university professors who also influenced my life.
The lessons I learned from Maulana Askari didn’t just stay within religious knowledge. He showed me how important it is to seek experts when dealing with things we don’t fully understand, like Shariah compliance in Islamic finance. Just like how I trusted Maulana with my Islamic education, I’ve learned that for complex issues like finance, we need to consult those who are experts in both Islamic law and Islamic banking principles.
Asking someone like Maulana Askari to explain Islamic finance terms like Murabaha or compare Mudarabah with Wakala would be like asking a history teacher to explain advanced chemistry. Even though they’re experts in their field, they may not have the right knowledge for something so specialized.
Islamic finance requires specific expertise because it must follow rules based on Shariah (Islamic law). These rules forbid certain things like riba (interest), speculation, and gambling. If you rely on advice from someone who doesn’t fully understand these financial rules, like a well-meaning family member or imam, you could end up doing something haram (forbidden) without even realizing it. So, it’s imperative for one to find someone or that can truly answer the question of is how do halal mortgages and even the basic question of what’s a halal mortgage.
Here are a few things to check when making sure a financial product follows Islamic teachings:
Look for an Islamic financial institution that has a Shariah Supervisory Board. This board should include 3 to 5 scholars who know both Islamic and modern finance. Their job is to make sure the financial product avoids riba (interest) and other forbidden elements.
Before committing to any product, check the scholars’ credentials:
The Shariah Supervisory Board should issue a fatwa or Shariah-compliance certificate after reviewing the financial product. This confirms that the product is in line with the principles of Islamic banking.
Verify that the Shariah certificate adheres to standards set by reputable bodies such as:
These organizations help ensure that Islamic financial institutions follow strict standards to avoid haram practices like riba, speculation, or gambling.
Ensure the Shariah-compliance certificate is updated through regular audits. This confirms that the financial institution continues to avoid prohibited activities and stays compliant with Shariah rules.
Just like you wouldn’t go to someone who isn’t a doctor for medical advice, it’s crucial to avoid seeking financial advice from people who aren’t trained in Islamic finance. The financial world can be complex, and making sure everything is halal requires specialized knowledge. Trusting someone who isn’t an expert can lead to serious issues, like accidentally engaging in riba or speculation.
If you rely on advice from someone who doesn’t fully understand the rules, you might end up engaging in haram activities without knowing it. This is similar to declaring a restaurant halal based on guesswork, only to find out later that they serve non-halal food. The consequences in finance are even more serious, as they can have both ethical and religious implications.
The global Islamic finance industry is growing fast, now worth more than USD 3 trillion. To make sure you’re following the right guidelines:
By following these guidelines, you can avoid haram activities and support the growth of the global Islamic financial system. Understanding Shariah Compliance in Islamic Finance is key to making ethical financial decisions that align with Islamic principles.
Ultimately, Allah (swt) knows best.
Halal Mortgages