Please ignore my posting in this forum for being off-topic. Also this is no religious war or religious issue discussion. It should be considered as an intellectual and informative - Admin please.
I appreciate misc420 for directing my efforts in finding a better solution to the question of PREMIUM. I am forwarding the reply of an Islamic Financial Scholar (www.islamonline.net) which partly supports misc420 view.
it is further requested to please read it for your own judgement and no further discussion at least in this forum. Personal emails are always welcome. My question is at the end of his reply:
Bismi Allah al Rahman al Rahim
Al Hamdu li Allah Rabb al 'Alamin
wa al Salatu wa al Salamu 'ala Sayyidina Muhammad wa 'Ala 'Alihi wa Ashabihi Ajma'in
Dear Br. Ahmed,
Al Salamu Alaykum Wa Rahmatullahi Wa Barakatuh
for the first impression, this premium practice appears as a normal business since the demand for immediate delivery is different from the demand for 6-8 month delivery. Certainly for a normal buyer who finds it lucrative to invest in this kind of business (providing immediate delivery) it appears a permissible normal business. Every body pursue opportunities of buy in order to sell at higher prices.
On the other hand, when individuals of influence and dealers create a shortage by advance booking of future production for the purpose of creating a surcharge on the price of immediate delivery, it becomes a monopoly practice. This kind of monopoly is literally what is prohibited in the Sayings of the Profit and unanimously agreed upon in Fiqh.
So it appear to me that the regulatory authority can put guidelines to distinguish between the two cases of permissible business and prohibited monopoly. such guidelines may include limits on quantities, enhancing production to void this practice, requiring full payments from such individuals and dealers, etc.
Wa Allahu A'lam
Wa Alhamdu li Allah Rabb al 'Alamin
Dr. Monzer Kahf
Dear Scholar Assalam o Alaikum:
I appreciate your time to read and directing me accordingly.
The question is about earning premium on sale of car. The scenario is as follows:
In Pakistan, in order to buy new car from the manufacturer one has to book it after paying complete advance payment. The normal delivery time is about 6-8 months. On the car display centers, people can see new models but immediate buying is not available unless they pay premium. For example if the manufacturer’s price is 1 million, the display center might ask 50,000 for immediate delivery. The other option is of course to wait 6-8 months for car delivery.
Now apart from display centers who are authorized dealers of manufacturers even individuals do book the car and wait for 6-8 months, upon delivery of the car the individuals resell it without bringing it in their own use thus charging premium. Sometimes this happens even before the car registration in the name of original person who booked it. It is commonly considered that in order to make more money and dealers and influential individual involved in this business, many end buyers either have to wait for 6-8 months or pay premium on this transaction. Because of dealers and influential individuals long booking for business reasons, the end buyer remains in queue for long time. As a result there is more demand and short supply in the given time.
My question is that if such premium is allowed? Or is it some kind of hoarding or “Zakira Andoozi”. i.e. buying something and storing it to create more demand and less in-time supply and charge extra money. Or this is a kind of business transaction and is not haram.
I will be grateful to your advice in this matter.