National Fatwa Council Causing Confusion Again

I received an e mail from a Muslim businessman saying that the National Fatwa Council had just made a fatwa which suggests that Muslims should not get involved in the moneychanging business. Moneychanging is perhaps the only business in Malaysia which is dominated by the Muslims. So does that mean even that too shall be taken away?

Bank Negara Malaysia has had to issue a clarification that forex trading is still allowed as licensed under the laws of Malaysia. So the National Fatwa Council has issued another clarification that they were ONLY referring to

"illegal spot forex schemes run by individuals through electronic platforms."

I think that is an afterthought by the NFC (not to be confused with the lembu people ok)

Here is a report in full from The Star :

Fatwa council clarifies ruling

PETALING JAYA: The National Fatwa Council has clarified that its ruling on foreign exchange trading (forex trading) actually refers to illegal spot forex schemes run by individuals through electronic platforms.

“The ruling does not involve forex through licensed money exchanges and licensed commercial banks,” he said in a statement yesterday.

Dr Abdul Shukor warned that Muslims should not participate in spot forex trading through electronic platforms due to doubts over the scheme as it involved individuals using the Internet with uncertain outcomes and was illegal.

Bank Negara said the buying and selling of foreign currency (forex) was only allowed through licensed commercial, Islamic and international Islamic banks.

“This is provided for under the Exchange Control Act 1953.

“With licensed money services business providers (moneychangers), this is provided for under the Money Services Business Act 2011,” its corporate communications department said in a statement.

The central bank was responding to a report that the National Fatwa Council had ruled that forex trading was forbidden or haram to Muslims.

It said that Syariah-compliant financial products, including foreign exchange-related transactions offered by licensed Islamic financial institutions, had been approved by their own Syariah committee and endorsed by the central bank’s Syariah Advisory Council.

In an immediate response, Association of Bumiputra Women in Business and Profession president Datuk Hazimah Zainuddin said it was better for Muslim traders to invest in businesses permissible in Islam.

The last statement by the Association of Bumiputra Women etc shows that the confusion caused by the NFC's fatwa has taken root.

The NFC should be told that for decades now all the banks in the country have been conducting forex transactions, instantly through electronic media and computerised transactions - on an international level. And most of the transactions are spot deals. The fact is a bank's FX dealing rooms or FX trading rooms are a major source of revenue for many banks. Even Bank Negara Malaysia has to undertake forex dealing on a spot basis everyday. It is necessary among other things to stabilise the value of the Malaysian Ringgit.

It does not make any difference if you have a license or you do not have a license, whether you are an individual or you are Bank Negara Malaysia who are trading in forex - the rules of forex trading are the same the world over. If it is "halal" for the people with licenses, it also has to be "halal" for those without licenses. And vice versa if it is "haram".

Once again the National Fatwa Council has gone beyond its expertise and said confusing things which have an impact on Muslims (many of whom are already confused).

The last time the NFC said something it also caused confusion in the country. It was their fatwa on yoga. Eventually the Malay Rulers had to intervene. The Malay Rulers even made a decision that in future, before making any fatwa, the NFC should refer all matters to the Conference of Rulers first.

Obviously the NFC has forgotten the advise of the Rulers.

Here are some news refreshers :

Malaysian rulers to have final say on yoga ban

Wed Nov 26 2008 - Kuala Lumpur, Nov 26 (IANS) The Sultans, the constitutional heads in Malaysian states, have cautioned against a hasty enforcement of an edict banning yoga exercises for Muslims, indicating that they, and the state level clergy would have the final say in the matter that has generated much debate. Accepting this, the Islamic Development Department director-general Wan Mohamad Sheikh Abd Aziz said the council’s edict would be discussed in the respective state fatwa committees. It is up to the individual Ruler and religious bodies of each state to accept or reject the National Fatwa Council’s edict to ban Muslims from practising yoga.

The Sultan of Selangor state, Sultan Sharafuddin Idris Shah, cautioned that the enforcement of the edict issued by the Council last week should not be done in haste, The Star newspaper said Wednesday. Both Sultan Sharafuddin and Raja Nazrin Shah said the matter should have been referred to the Conference of Malay Rulers.

Here is another news report from that time:

In comments bordering on a rebuke, Sultan Sharafuddin Idris Shah, who rules the central state of Selangor, said the body should have first consulted the nine hereditary Malay rulers before announcing the edict, or fatwa.

The sultan's unprecedented public comment on the issue has suggested deep divisions over who can speak for Malaysia's Muslim majority on matters of faith.

In his statement, Sharafuddin said he hoped "that in future, any fatwa decision that touches on issues involving the general public should be referred to the Conference of Rulers to be approved first before it is announced".

"This is to ensure that the process of channelling the fatwa decision is implemented wisely to avoid any confusion and controversy," the Selangor ruler said.

The last point by the Sultan of Selangor is important :

"that in future, any fatwa decision that touches on issues involving the general public should be referred to the Conference of Rulers to be approved first before it is announced". "This is to ensure that the process of channelling the fatwa decision is implemented wisely to avoid any confusion and controversy," the Selangor ruler said.

It looks like the National Fatwa Council has forgotten what the Sultan of Selangor said. There is a reason why the Sultan made such a strong statement.

The reason is because the NFC's fatwas have a habit of causing "confusion and controversy". Their latest ruling on the Forex trading is just another example. Now Bank Negara Malaysia has had to come out and clarify the matter.

There are enough laws and rules in the country. I think the NFC does not have to touch on subjects that are already dealt with by our existing laws. And our Malaysian laws are good enough for Muslims as well as non Muslims. If you want to trade in Forex inside Malaysia you need a license. If you do not have a license, then it is illegal. The people know that.

There is no point saying "unlicensed" spot deals in FX trading are haram. Malaysian banks and Bank Negara Malaysia undertake exactly the same instantaneous computerised FX trading everyday. The only difference is they have a license. So if you have a license it is not "haram" anymore?