 We shall continue with our conversation on the criticisms on Islamic modes of finance. This conversation should be taken lightly by me and by you as well, and we should maintain our sense of humor. It's not anything against anyone. We are having a conversation with a view to improve our understanding of Islamic banking and finance in general and of Islamic modes of finance in particular. Let us look at this general criticism. And this is done by some people who have good understanding of Islamic banking and finance and of the use of Islamic modes of finance in this context and they have apparently good understanding of Islamic jurisprudence as well. So they say combining contracts in one transaction is impermissible and as almost all Islamic financial products combine various Islamic contracts in one way or the other, such products are not sharia authentic or they might say that such products may not be sharia compliant. And they present a hadith of Prophet Sallallahu Alaihi Wasallam which forbids combining two contracts in one contract. And hence these guys, these critics, they say Islamic banks must not do so if they are truly Islamic. So this is a criticism lodged by some scholarly people on Islamic banking and finance. I must say that this is based on this confusion around the hadith. Yes, Prophet Sallallahu Alaihi Wasallam definitely forbids combining two contracts in one contract. And that was in a context. So combining two contracts in one contract is not allowed. This is true. However, using one contract concurrently with another contract or other contracts, this is not forbidden. So I can have a sale contract with someone and at the same time I can have another sale contract as long as these two contracts are independent and they stand on their own, this is okay. So combining two contracts, there are different examples in the conventional text. For example, if I say that no, I am going to sell this item to you only if you buy this item as well. Just like I say to someone, you are buying a pair of shoes or you want to buy them, I would sell this pair of shoes to you only if you buy this Polish Dibya Visaab. So this if is very important. You are combining. So this is not permissible. You both sell separately. Now in shops, these things are also combined. They are called bundling of products. That is acceptable. That bundle can have one price. That is okay from Sharia viewpoint. I must clarify. Now another one, a lot of the jurists say that this combining two contracts in one contract is to make sure that there is no riba. You tell someone to buy this car, but you also tell them to give me the loan. You are buying this car and you are also taking the loan from it. Now because this lending thing is very very sensitive in an Islamic framework, you can adjust the price in such a way that you are giving the benefit of interest to a party. To curb that kind of tendency, combining two contracts in one contract was not allowed. So this is in a very specific kind of context. Now let's see this example. If someone opts for a diminishing musharaka based mode of financing and does not want to continue with the Ijarra contract, which is part of the structure. So this is a diminishing musharaka based home financing for example, in which case this musharaka agreement is between the two parties. And then there is a lease agreement between the two parties as well. First one to which the customer of the bank lives in the property and pays the rental to the bank. Now if down the road after three months, six months, the customer says I want to continue with this Islamic mortgage based on diminishing musharaka. However, I don't want to continue with this Ijarra agreement. Because this Ijarra agreement is being disputed now, it doesn't mean that the partnership musharaka agreement would be questioned. This is not the case. So if for some reason Ijarra contract lapses, it would not automatically lapse the musharaka agreement. Musharaka agreement would stay intact. This is a very fine legal point. Now if someone wants to come out of the Ijarra agreement, then in most cases, in almost all cases, there would be a conversation for restructuring. Now this conversation for restructuring doesn't take place because musharaka has lapsed. Rather this is a regulatory requirement in many cases. For example, if the customer says I don't want to continue with Ijarra, rather I would like to rent this house to someone else. Now the nature of the product changes from regulation viewpoint. Regulator in UK for example would say that you can use this product for your own purpose. If you want to use this house for renting to someone else, then they call that product buy-to-let. That comes into business. Then they say alright restructure the deal and get this as a buy-to-let mortgage for which there are different tax implications. There is no issue with Sharia. So this thing has to be clearly submitted. There are very fine legal points. Let's explain this legal point with reference to a simpler example. Party A leases a car to another party B for one year. Party B enters into a service agency with Party A, pursuant to which Party A should get the car maintained on a regular basis. We have given you a lease. Maintaining the car is my responsibility. However, I have this service agency agreement with you. You should maintain it. Now that person doesn't maintain it. And the service agency agreement is problematic. They will bring replacement for service agency agreement, not to close the lease. So Lesor can say that okay, you are not maintaining it. From now on I am going to maintain my own car. So lapse of service agency would not automatically lead to the cancellation of the lease agreement. If the Lesor wants to end the lease agreement, he or she will have to take an independent action. So all these contracts which are used in Islamic banking and finance, they are structured in such a way that they must stand on their own in case there is a problem with one contract or the two contracts within a bigger structure.