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Obstacles posed by banks to reduce the refinancing

2010-01-23T10:48:00.000-08:00

Contribute to re-finance in the rescue of many institutions and individuals from their financial difficulties and provide opportunities for borrowers to take advantage of macro-economic changes and partial in addition to being one of the important channels for raising the levels of credit.

The central banks seek to raise levels of credit to the revitalization of the economy and increase economic growth rates in the event of deflation. When a decline in levels of economic activity declining corporate profits and economic incomes drop derived from the investment in financial assets and in kind.

Therefore, the re-funding at the rate of decline in borrowing costs reduce the debt burden on institutions and individuals, and provide opportunities to provide financial resources to increase investment and consumption of individuals and institutions which are active in the economic sectors of the economic slowdown.

It can refinance existing loans from the financial institution itself, which borrowed from the person or institution or other financial institution. And put banks in the Kingdom of conditions to qualify for the refinancing of the same financial institution or other financial institutions, some reasonable and some of them seem arbitrary and exaggerated.

The use of banks in the Kingdom to set conditions and obstacles for reducing re-financing of the financial institution itself and more emphasis in the event of another financial institution to re-finance.

One of those conditions or rather the obstacles to a minimum rate of repayment of the loan before they can qualify for refinancing. And require some banks in the Kingdom of the payment of at least 15 or 20 per cent to qualify for refinancing. This imposes the ratio of banks to maintain their profits from loans, as the share of the benefits or profits at the beginning of loans are high.

For this bank might receive 40 per cent of the gross profits in the case of a 20 per cent of the term of the loan. Rising interest borrowers from refinancing if you are at the beginning of the loan, but if oversaw the loan to an end, the benefit of borrowers refinancing operations be limited. The borrowers are advised to continue in the repayment of loans if the remaining period is limited and for example, less than a quarter of the period.

Local banks will also raise the annual rate of return or interest in the case of refinancing, where banks raise the rate of return on total loans refinanced by between 2 to 4 per cent above the prevailing lending rates in the market. The process of re-financing through two phases, where you must pay the current value of the loan or the balance thereof in the first phase. In the second stage gets the borrower to repay the loan surplus replaced.

It is well known that banks in the UK imposed in the case of early payment of some duties that are either a lump sum in the event that the small size of the loan or a percentage of the remaining amount up to 2 per cent or more of the remaining amount of the loan. Not only that, but that the banks are calculating the rate of return or the annual interest on the total loan which is for the most part, in many cases, the remaining part of the previous loan.

This means that in many cases, the banks raise interest rates on the old loan (replaced), and thus earn high commissions and amounts in return for re-financing. A vivid example was the attempt to get someone to refinance for a personal loan from a local bank after a year of a personal loan of five years. The Bank had informed him that he must pay more than 91 thousand riyals in additional expenses for the 49 thousand riyals from the bank. In other words, the bank would receive through the process of refinancing profits or benefits of more than 42 thousand riyals.

This amount represents the composite interest rate exceeds 13 per cent annually. This situation is not limited to a designated bank, but practiced by local banks, without exception.

Resort to the banks and other impediments to reduce the debt refinancing, the most important of procrastination and spend a lot of time in administrative procedures. There is, to my knowledge, which protects borrowers from unfair banking practices in the re-financing. Bear the Saudi Arabian Monetary Agency responsible for overseeing the commercial banks and therefore expensive to reduce unfair practices established by the commercial banks to exploit the borrowers need for additional funding.

It may be the practice of commercial banks is not fair to reduce re-financing a big role in reducing the levels of growth in domestic credit, despite the significant reduction in interest rates or borrowing costs. Unless Monetary put an end to these practices, the policies followed by the revitalization of lending would be limited impact.

Borrowers also bears a great responsibility when signing the loan contracts that subjected them to many other conditions, including that prevent re-qualify for funding only after the payment of fees and has many benefits. The banks should be required at the signing of loans should be abolished or at least reduction of fees for early payment and to facilitate the procedures, so that people and institutions to acquire a greater ability to refinance at lower costs. And should the Assembly of consumer protection lawsuits against banks that charge obscene profits from re-financing. They defend the rights of borrowers to obtain refinancing at lower cost and in accordance with the conditions better.

* Quoted by the Saudi Economic.

mortgages

2010-01-23T10:43:00.000-08:00

In the first of October (October) agreed last Congress to establish a fund called "Fund hope for homeowners" Hope for Homeowners, at a value of $ 300 billion under the supervision of the Federal Housing Administration to help borrowers insolvent homeowners. It was expected that the Fund assisted 400 thousand insolvent.

It was surprising to those in charge of the Fund that the number of applicants to benefit from its loans, with reduced interest rates very low until recently. The program was requested by the lenders to forgive, but a voluntary basis, some debts to insolvent homeowners.

At a time when the government insurance for half the value of the debt for homeowners to involve the government in any profits they could do from the sale of their homes.

This program differs in its objectives for the program known the other, Congress established under the name "program to buy distressed assets" Troubled Assets Purchase Program with a capital of 700 billion dollars and was the primary purpose is to help banks. At a Congressional hearing on November 17 (November), attended by Henry Paulson, Treasury secretary in charge of administering a second fund, Ben Bernanke, Chairman of the Federal Reserve Bank of Central and Sheila Bair, chair of the company's Federal Deposit Insurance Corporation, called on members of Congress and Secretary of the Treasury to use a portion of the fund to help homeowners.

While acknowledging that the minister is empowered by the law of the Fund such authority, the minister refused such use, on the grounds that the primary purpose of the Fund is to help stabilize the financial sector and not spending to stimulate the economy. However, Ms. Sheila Bair warned the meeting to five million families in danger of losing their homes over the next two years, unless the government to take further action.

And warned that the stakes are high and time is tight, so it can not rely on voluntary agreements. If the forecast Miss Bear, ten times the "Pandora's box" referred to will not be enough to help all who stood to lose their homes! This means that it will be the next president Barack Obama, the problem of economic, social, very volatile, not to mention the problems existing in other sectors of the U.S. economy! Will not only negative effects on the U.S. economy alone, but will extend to other parts of the world, including the Petroleum Exporting Countries.

It is quite clear that the government and Congress do not possess a general framework to solve these problems, and that it is dealing with each sector in a manner of trial and error, in November 12 (November), ie, before the hearing referred to, Henry Paulson issued a lengthy statement explaining the action taken up to that date, as he explained what he intends to do during the coming period until the end of President George W. Bush.

The most important decision of the minister is the reverse of the troubled assets purchase program for banks and replaced by the direct investment in their capital. It also decided to go direct to the sectors that provide loans to consumers and the automotive sector as credit card companies. In fact it is, although these and other programs are trying to pump more liquidity into the veins of the U.S. economy, but they lead to the creation of more debt to other sectors at the same time.

Indeed, the government investment in banks, but capital is through the purchase of preference shares where, and these shares but is in fact a kind of bond interest! It is very surprising that the statement of Henry Paulson did not include any reference to the possibility of inflation in the future due to increased liquidity, which will be published in the arteries of the U.S. economy, this will be the problem within the heavy legacy we leave the next president.

Although one can not deny the need to inject liquidity into the economy in situations like this, but the problem is not lack of liquidity, but with the problem of lack of confidence in the fact of the U.S. economy is now also in the future. To restore this trust, it is essential to assure the greatest possible number of parties concerned by the crisis, and directly as possible. This would reduce the need to pump more liquidity.

At a time when the U.S. government has succeeded so far in preventing a complete collapse of the U.S. financial system, as Secretary Paulson has argued, but it is clear that all actions have not succeeded in preventing further loss of distressed families to their homes and prevent more companies from the demobilization of its employees.

We argue that the re-formulation of the plans in a manner consistent with Islamic law could provide a solution to the problem of the mortgage, much better than what is prescribed in the programs offered, although a comprehensive solution to the crisis required the procedures more extensive than we will propose in this article.

Summed up the Islamic solution in five procedures or rules of the first and the preventive measure, and the other treatments. The preventive measure is to amend the laws governing the financial markets, so as to prevent all contracts that contain interest "usury", gambling, obscene ignorance.

As the financial system, particularly in industrialized countries mired in such buzz these contracts, this procedure should be part of long-term plan to reform the system, and this requires many details of the place is not here. Therefore, we turn to remedial actions to own mortgage problem and then move to how to apply them.

The rule is the first treatment as saying the Almighty, "but if you have your capital now onward," it did not stop this rule to resolve the crisis added to the second base treatment, "though he is in a hard look at the soft", the Tikvah not add them to the third treatment meaning "and believe it is better for you if you know", the three of these were not added to them Kaviat fourth rule of God's Prophet peace be upon him "Put and speed", and it seems that the crisis is so serious that it requires the introduction of all the rules, the above therapeutic mentioned once, as we shall see below:

First: is the money that the government into the financial system in payment of debts to banks on behalf of the owners of real estate insolvent, according to the detail that will appear in the rest of the points of this solution.

Secondly: Since banks had a major role in the emergence and escalation of this crisis, it should bear a share of the cost of the solution. This includes the exemption of all debtors of all the benefits of debt. This application of a therapeutic first referred to above. It should also extend the repayment period to the extent commensurate with the size of the debt and the size of the debtor's income and wealth, and this application for a second treatment.

Third: to exempt all debtors from a certain amount of the original debt according to the rules referred to in point II. This application of a therapeutic third.

IV: no more than the amount of debt relief for the original one third, and the application of the Prophet peace be upon him "one third and one third is too much."

Fifth: The banks of families fulfilling the debt on behalf of the city government.

VI: The premiums paid are as varied as the conditions of the debtor in terms of income and wealth, to be clear controls to estimate it.

Seventh: the unemployed are exempt from paying premiums for unemployment of work, not to reduce the volume of the remaining debt on them, and not to increase the exemption period for a full year.

Eighth: the debtor can increase the amount of premiums paid, to obtain a reduction of the value of the remaining debt owed by one third of the increase in the value of the premium Almtojb, and not to be a source of payment create another religion, and this reduction in therapeutic application of the rule of four.

IX: preventing the bank and all financial institutions to sell their debts to reduce opportunistic motives that lead to the creation of more debt.

Tenth: preventing the bank from insurance on the debt temporarily, in order to reduce opportunistic motives and also so that a clear controls for this, but be insurance for the government.

Eleventh: give all creditors of insolvent a grace period of between one and three years and this second application of the rule unless the debtor to sell the home, sold by the government is to meet all debt of the sales price.

XII: The government puts the controls and sanctions necessary to prevent fraud on this program.

Would the solution we are proposing to provide a safety net for the economic and social insolvent debtors, while providing the bank-some or all of the necessary liquidity to move the financial system, and this procedure will reduce the pressure of the need for creditors and debtors to sell houses, and thus reduce pressure on prices down. The availability of reassurance to the city will encourage families to spend on other needs, helping to revitalize the economic cycle and pumped into the financial system more liquidity.

The solution we propose eliminates the need for the government to buy distressed assets of financial institutions or to buy the shares, and therefore permissible for her to assess the problem of financial assets is very difficult to know the real value in such circumstances. This was one of the most difficult objections made by opponents of the plan to buy troubled assets.

The solution that we propose reduces the amount of liquidity to be pumped into the financial system as soon as the atmosphere of enhanced confidence in the system under which, and thus reduce the government debt, while easing the inflationary pressures in the foreseeable future.

* Quoted by the "economic" Saudi Arabia.

Insurance

2010-01-15T02:28:00.000-08:00

For Hamad Allah, Lord of the Worlds, and prayers and peace be upon His Prophets and Messengers, our Prophet Muhammad and his family and companions.

After:

These papers attempt to describe the reality of Company for Cooperative Insurance, whether they are engaged in cooperative insurance or commercial.

And attend the convening of this attempt in the following points:

First: the definition of the company.

Second: The types of insurance.

Thirdly: the rule of insurance.

IV: The difference between commercial insurance and cooperative insurance.

Fifth: Is Company for Cooperative Insurance exercised or cooperative insurance business?

VI: the rule of subscription for Cooperative Insurance Company.

This attempt is the keys to the students of science to know the truth about the company, and then make their opinion there.

I ask God Almighty to benefit them, and be a good help to those who issued the advisory opinion.

And Allaah knows best blessings and peace upon our Prophet Muhammad and his family and companions.

Books

Khalid Bin Ibrahim Aldeiji

[

1. Definition of the company.

Established National Company for Cooperative Insurance in 1986 a Saudi closed joint stock company, a wholly owned Saudi government institutions are set out as follows:

Public Investment Fund 50%, the General Organization for Social Insurance 25%, the pension fund 25%. The purpose of the company engaged in cooperative insurance, the main activity of the company in providing all insurance services, cars, marine, fire, energy, medical, engineering, aviation, insurance and various incidents.

The company manages the insurance business on behalf of the insured, will also provide funding for the insurance operations when needed.

And charge the company fees for managing the investments of insurance operations equal to 10% of the net investment income of insurance operations.

Selling 70% stake in the company of the citizens.

The Council of Ministers Resolution No. 112, dated 5/4/1425 AH, for the sale of the entire stock of state-owned Public Investment Fund of the Company for Cooperative Insurance and 50% and 10% of the contributions of the General Organization for Social Insurance, and 10% of the contributions of the Public Pension Agency . Vicu total ratio 70%.

Identified on Tuesday the ninth of November than in 1425 to launch IPO citizens (1).

2. Types of insurance:

Insurance is divided in terms of form into two parts:

Section I: Cooperative Insurance, or interactively.

A - concept: "to meet a number of persons at risk were similar, and each of them paying a certain contributions, such contributions are allocated to perform the compensation due to damage to those who fall ill, and if increased contributions to the rate of compensation for the members of the right to reclaim, and if decreased with the participation of additional members was sought to cover the deficit or decreased compensation payable by the deficit, and the members of the cooperative insurance companies do not seek to make a profit, but they seek to mitigate the losses incurred by some members, they are contracted to cooperate to withstand a disaster could be resolved with each other "(2).

A - The reason: a fatwa is permissible jurisprudential all the meetings which dealt with insurance, including:

Principles of the second week was held in Damascus in 1961, a festival known as Ibn Taymiyya, and the second conference of scientists held in Cairo in 1385 AH, the Seventh Conference also held in Cairo in 1392 AH, the first conference of Islamic Economics, held in Makkah in 1396 AH, the Fiqh Council of the Commonwealth of the seventh Islamic world in general 1398 H, and the decision of Senior Scholars in Saudi Arabia in its resolution No. 300/2/1399, and the decision of the Fiqh Council of Organization of the Islamic Conference in 1406 AH.

For this transfer of consensus on the permissible number of bodies as a legitimate Rajhi legitimacy in its advisory opinion No. (40), as well as Sheikh Dr. Mustafa al-Zarqa "God's mercy" (3).

But in this view, as there is consensus from the scholars of the era of the violation in this matter and believes it is haraam, including Dr. Solomon Thunayan in his insurance and provisions (4).

Section II: commercial insurance or a straight line.

Concept: In this integral the insured (the insurance company) for the custodians who have contracted with each and every one of them separately and the distribution of insured risks to the insured in the form of fixed periodic payments determined in accordance with the requirements of the technical foundations upon which the rules of statistics. Committed to the insured under this contract to pay the amount of insurance upon the fulfillment of the incident, which depends upon maturity and undertakes to the insured (the insurance company) to pay this amount without solidarity, in coordination with the custodians and more of his money, it accounted for by the insured and bear the loss (5).

Rule: Contemporary scholars differed in the governance of this insurance there are two views:

I say: It is forbidden according to the majority of contemporary scholars, and its decision was the senior scholars in Saudi Arabia, No. 51 and the date of 4/4/1397 AH. , As well as the Islamic Fiqh Academy of the Muslim World League in its first session, August 1398, as well as the International Islamic Fiqh Academy of the Organization of the Islamic Conference, resolution No. 9 (9 / 2) in 1406 AH = 1985.

Second opinion: the passport, and its decision was issued Shariah Board of Al-Rajhi Banking No. 40 (6) and defeated him by contemporary scholars, Sheikh Dr. Mustafa al-Zarqa Allah's mercy (7).

Which swings the researcher sanctity of commercial insurance, the strength of evidence and the weakness of chaperones as permissible evidence. Can not be over this quick presentation of evidence and discussion.

3. The difference between commercial insurance and cooperative sectors.

Modern scholars have noted several differences, and is highlighted as follows:

The first difference: the cooperative insurance contracts that are intended to donate the authenticity of cooperation in the fragmentation of risks, premiums from policyholders in the insurance cooperative take recipe gift (donation) (8).

The commercial insurance contracts is the financial potential trade-offs.

The second difference: that the compensation in the cooperative insurance premiums paid of the total available. If the premiums were not sufficient to meet the compensation requested members to increase their contributions to make up the difference. If contributions could be increased to meet the compensation is not compensation, since there is no contractual obligation for compensation. The commercial insurance there is an obligation for compensation for insurance premiums. The effect of this commitment the company to bear the risk of the parent of the insured without the other custodians. Therefore, the objective of the Decade was the netting, but this does not allow netting a profit of both parties, but the company won, lost profit repository repository but the company lost. They include netting a profit against a loss of one of the parties and the other must have eaten this money unlawfully (9).

The third difference: in the commercial insurance company can not compensate for the custodians if they exceed the percentage of people infected with the company's ability to itself, while in cooperative insurance, the total custodians collaborators in meeting the compensation payable for those of them, shall be compensated according to the availability of membership dues.

Valmstomn in the cooperative insurance does not wait for a certain amount in advance if there is danger, but expected to be compensated according to his peers combined insurance fund solvency and the ability of members to be compensated. Valtmoninp felt by the collaborative repository stemming from feelings of others standing with him, and not instead of under a specific contractual obligation not telling the truth, in reality, as is the case in the commercial insurance (10).

Fourth difference: the cooperative insurance was not intended to Alastrabah of the difference between insurance premiums paid by Almstomnon and damages by the insurer to have but if there was an increase in premiums Almajabip for compensation paid to repair damages to the increase are the custodians (11).

While the surplus in the insurance commercial insurance would be the share of the company.

The difference V: believers are Almstomnon in the cooperative insurance, and premiums paid to the use of cooperative insurance company except as their well-all. In the commercial insurance company is a believer external to the company, and the insurance company commercial exploitation of the custodians of funds in the beneficial alone (12).

The difference VI: cooperative insurance company goal is to achieve cooperation among its members, custodians, and the distribution of risks between them, no sense complaining about that one of them complain about it all. In other words, it is not profitable, but hopes they would like to cover the compensation and administrative expenses. On the contrary, the insurance company the sole purpose of trade is trade insurance and access to huge profits at the expense of the custodians (13).

The difference VII: Cooperative Insurance Company in the relationship between the policyholders and the insurance company on the following basis:

A - The shareholders in the company management of insurance operations, to prepare documents and the collection of premiums and payment of compensation and other works of art, in return for payment in their capacities as managers of insurance and provides for this payment so that a participant is deemed viable to them.

B - the shareholders to invest (capital), submitted them to obtain a license to establish the company, as well as having to invest money provided by insurance policyholders, that the company deserves a share of the return on investment of insurance funds as speculative.

C - holding company separate accounts, one for capital investment, and the other for the accounts of insurance funds and the excess insurance the prerogative of the participants (policyholders).

D - is borne by shareholders bear the expenses related to speculative investment funds its share of the profit peer speculation, and bear all the expenses of managing insurance-peer management commission owed to them

E - cut statutory reserve funds of the investment returns of shareholders and have their rights and everything that must be deducted which relates to capital. (14).

While the relationship between the policyholders and the insurance company, in commercial insurance, the amount paid to holders of the funds are the property of the company and mixed with the capital for insurance. There is no two accounts are separate as in the cooperative insurance.

Difference VIII: Almstomnon in the cooperative insurance companies, are the partner that they are entitled to profits from the investment of their money.

The commercial insurance companies, the picture is quite different; because custodians are not partners, not entitled to any profit from investing their money, but unique to the Company access to all the profits (15).

Difference IX: cooperative insurance companies do not invest in areas which are forbidden in Islam.

In contrast, Fsharkp commercial insurance does not care about Halal and Haram

(16).

The difference X: in the cooperative insurance must be provided in the contract that the amount paid repository is only a donation and that it pays the premium for the company to help those who need it by the participants (17). In the commercial insurance are not the intention to donate at all, and therefore not mentioned in the contract.

4. Is Company for Cooperative Insurance commercial insurance practice or cooperative?.

Back through the researcher to the lists of the company's financial, show him the following:

A - that the company has separate financial disclosure documents to a campaign entity and financial, there are two accounts, one for independent campaign documents and another for the company, as well as the investment of funds campaign documents part of the net profits of 10%, as well as the management of insurance operations as a lump sum, which is applied in this way decision of Economic Seminar twelfth Dallah Al-Baraka.

Here's a statement of the amounts received by the Company in this work:

First: the salaries of the operation and management + General and administrative expenses Other:

Religious vision of the cooperative insurance company

Click here to download the book on the Word file

Khalid Bin Ibrahim Aldeiji

Year 1998 1999 2000 2001 2002 2003

Amount (in thousands of Saudi riyals) 38,383 40,090 50,094 68,376 72,366 92,373

II: management fees.

According to the clarification of these fees by saying: "charge the company fees for managing the investments of insurance operations equal to 10% of the net investment income of insurance operations."

Here's a statement of the amounts of such fees:

Year 1998 1999 2000 2001 2002 2003

Amount (in thousands of Saudi riyals) 2,084 2,204 3,446 2,441 4,249 6,763

B - as well as the company has applied the decision of some legitimate bodies that if the judge has been an increase in premiums Almajabip on compensation paid to repair damages to the increase are the custodians.

Here's a statement of such amounts to the return Mstoemien, and a proportion of gross written premiums,

Refunds to policyholders and a proportion of total insurance premiums: (amount in thousands of Saudi Riyals)

Year 1998 1999 2000 2001 2002 2003

Total insurance premiums 683,765 682,742 716,983 1,023,206 1,081,173 1,545,797

Refund and the percentage of the total insurance premiums 18.200

2.66% No 22,000

3.06% 15,800

1.54% 10,000

0.92% 18,000

1.16%

This is done by the company during the past six years, which will apply as stated in the decisions of certain bodies of legitimacy.

However, Shaykh Abdul Aziz ibn Baaz, editor of the advisory opinion of him is not permissible to return some money to participants in the cooperative insurance and may God have mercy on him said: "A resolution by the Council of Senior Scholars, a cooperative insurance passport, which consists of donations from benefactors and is intended to help the needy and stricken and does not return anything from him for customers - no money, no capital gains nor any return on investment - because the reward of common purpose God help the needy and was not intended return secularized "(18).

C - The most important differences between the cooperative and commercial insurance as Shaykh Abdul Aziz, may God have mercy on him is that the cooperative insurance based on voluntary contributions, and this is the crux of the matter, and not in the documents of the company or its policies or contracts to that effect.

D - and of the differences between the cooperative insurance and commercial insurance cooperative that do not adhere to the company's compensation as explained above. And not in the documents of the company and its policy to indicate that as well. But the reality that the company is committed to compensation at all.

Hence we see that commercial insurance companies to resort to re-insurance with other companies because of its compensation.

Valtaonip insurance applied this principle, and this has held several reinsurance contracts with Germany, here's the value of these contracts:

The value of reinsurance contracts during the previous years:

Year 1998 1999 2000 2001 2002 2003

Amount (in thousands of Saudi riyals) 487,352 424,671 498,845 735,523 663,152 716,584

If that were practiced by the insurance company committed to cooperative compensation, because if the extent and increased compensation for the value of the fund to require participants to donate, or they pay a rate of compensation.

E - the whole contemporary scholars, both of whom passed the commercial insurance or prevented, the need to avoid taboos in their dealings at all.

But we find in charge of this company - God forgive them - have invested fund bonds forbidden to pieces, and you reflect the amounts deducted from the fund to invest in bonds and percentage of the assets of the Fund.

Value of the company's investment securities custodians of the funds, the rate of the assets of the Fund:

Year 1998 1999 2000 2001 2002 2003

Amount (in thousands of Saudi riyals) 336,110

42.88% 399,550

(46.23%) 338,172

(33.95%) 343,346

(29.06%) 419,417

(31.19%) 430,525

(24.34%)

There are other investments in securities did not disclose the company's quality, not being a researcher did not find out more about them.

5. What do shareholders invest their money?.

Mentioned above that the company made two separate accounts:

The expense of policyholders, the calculation of money for the shareholders who reminded them in the first point, note that the company was founded when the amount paid (250,000) thousand riyals. And then invested this money in various investments, here are the outcome of these investments and what became of him:

Assets of the Fund shareholders during the previous years:

Year 1998 1999 2000 2001 2002 2003

Amount (in thousands of Saudi riyals) 406,436 387,879 385,711 353,755 354,619 428,686

Varied investments of our shareholders for their money, but will mention the most important investments that affect the ruling on subscribing to this company:

First Investment: Investing in bonds of usury:

Year 1998 1999 2000 2001 2002 2003

Amount (in thousands of riyals) None None 121,595

31.52% 88,161

24.92% 72,397

20.41% 34,981

8.16%

It is known that modern scholars have agreed that if the company provided in the prospectus that it will borrow or lend money with interest is not permissible for the IPO, so that the company announced this explicitly to all people, and practiced this act is forbidden in practice, it is submitted to the subscription has Oqarham of vision and this the act is forbidden, and is a partner with them on this haraam action.

Note that the company has investments in securities, but did not disclose the quality and nature.

The second investment: investing in commercial insurance companies:

The company announced in their lists that they already have 50% of the insurance company, colleague, researcher had asked the name of the company, namely: United Insurance Company, headquartered in Bahrain, and the exercise of commercial insurance, and the value of this investment (24,097) thousand, and represents the ratio of 5.86 % of the assets of the company.

6. Buying shares Company for Cooperative Insurance.

The above shows that the researcher may not be subscribed to this company for the following reasons:

First: that practiced by the insurance company does not much different from commercial insurance. Despite the company's attempt to separate the accounts of the custodians of shareholders but that the element of the compensation obligation whatsoever contrary to this chapter, and makes the company acting as if the accounts were held one account.

Second: the company is investing a significant amount in bonds usury, has issued two resolutions parks Vgahian forbids this kind of contribution, namely, the Fiqh Council of the Organization of Islamic Conference, the Fiqh Council of the Association of the Islamic world.

Third: The company is investing part of their funds commercial insurance companies is prohibited.

Fourth: The company does not declare their commitment to the provisions of Islamic law, do not abide by Sharia on all financial activities.

May Allaah send blessings and peace upon our Prophet Muhammad and his family and companions.

---------------------------

(1) economic newspaper, Monday 25 Ramadan 142 AH, the number 4064.

(2) ambiguity and its impact on the contracts, p. 638, Dr. Blind, the second edition. Publications from within the Dallah Al Baraka Group.

(3) advisory opinions on insurance, p. 88, a publication of Dallah Al-Baraka.

(4), p. 282-283.

(5) study the legitimacy of the most important financial contracts, developed, Dr. Muhammad Mustafa Shanqeeti 2 / 475.

(6) resolutions of the Shariah Board of Al-Rajhi Banking 3 / 357.

(7) Fataawa insurance, p. 45.

(8) decision by the Council of Senior Scholars, No. (51) and the date of 4/4/1397 AH.

(9) and stops in the case of insurance, p. 20, by Dr. Sami Al-Suwailem.

(10) and stops in the case of insurance, p. 21, by Dr. Sami Al-Suwailem.

(11) Shariah Board of Al-Rajhi Bank, Fatwa No. 42.

(12) advisory opinion of the legitimacy of the Faisal Islamic Bank, citing the opinions of insurance p. 99.

(13) Ibid.

(14) Al Baraka Symposium twelfth of Islamic economics, decisions and recommendations of symposia Baraka Islamic Economy, p. 212.

(15) opinions of Shariah Board of Faysal Islamic Bank, citing opinions from the insurance, p. 105.

(16) opinions of Shariah Board of Faysal Islamic Bank, citing fatwas insurance p. 105.

(17) opinions of Shariah Board of Faysal Islamic Bank, citing fatwas insurance p. 91.

(18) a statement from Sheikh Allah's mercy in the history of 22/2/1417 AH.

Car Insurance

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Car Insurance

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