 In this module, we will continue with our discussion on treatment of credit and credit cards in an Islamic framework. In the previous module, we established or we argued that credit sales are permitted in Islam. And we gave examples of Bamu Ajjal, Ba Salam and Ba Istisna. So, sales of Istisna, sales of Salam, sales of Murabahamu Ajjal, these are acceptable in Islam. We also argued that money can also be lent but without charging interest. And we established the fact that different currencies can be exchanged but only on spot. There might be some very awkward questions around this third point but we would not go into the technical details. Our focus is on credit and credit cards in this part of the course. Let us relook at the thing. We said that this is a spot sale whereby the commodity, the object of sale is delivered now in exchange for the price paid now. This is a spot sale. This is a base level sale contract in Islam which is acceptable. Then we look into the credit sale Bamu Ajjal and we said Bamu Ajjal is acceptable. And in fact, in case of Bamu Ajjal, it is quite possible for the seller to charge a higher price because the price is going to be paid on a future date. So, it is possible to charge a price P plus which is higher than P given that this is a credit sale. Let me repeat, in credit sales it is possible for the seller to charge a higher price than the spot price of the commodity and this is acceptable. In case of Baselam where the price is paid upfront and the delivery of commodity takes place on a future date, it is quite acceptable for the Selam price to be lower than the prevailing market price. And this is acceptable as well in an Islamic economic framework. Now, I am referring to these examples because there is an implicit reference to credit and its treatment in these sales. In case of Istisna, the price is paid progressively and this price P star can actually be different. It can be higher or it can be lower than the prevailing market price of the item if it happens to be available in the market. Remember in case of Istisna, the item is manufactured is made over a certain time period and this could be a unique item. However, if similar kind of items are available in the market, the price charged by the seller could be higher because the seller may say that I am coming up with a bespoke item for you hence I have to charge higher. Or in certain cases, the seller might agree to a lower price because the cost of production could be lower for that seller. Now, when it comes to exchanging money, Islamic law becomes very strict. Even on spot basis, it is prohibited to exchange 10 dollars for more than 10 dollars even on spot. Can you give me an example of this kind of exchange whereby one person is giving you 1000 rupees and you are receiving only 900 rupees on spot? Can you come up with an example? You might think that this is crazy. No one would agree to this one. But actually, this happens in the market around each time. That is actually prohibited because even on spot, this is not accepted in Islamic law. Now, if some amount of dollars is given by party A to party B now in exchange for a higher amount of dollars, of course, this is an interest based loan. This is not accepted in an Islamic legal framework. And this remains prohibited even if the payment of the loan is in installments. Some money is paid at T1, some money at T2 and so on. But this would remain prohibited as long as dollar star or dollar plus is greater than dollar i.e. as long as unequal amounts of dollar are exchanged between the two parties. Now, spot exchange is this example where a certain amount of dollars is exchanged for certain amount of rupees on spot. Now, when it comes to spot currency exchange, Islam is slightly relaxed if the exchange rate today is 1 dollar is equal to 175 rupees per example. And if I want to do a spot currency exchange today, it is permitted for us to go for an exchange rate which is different from the market exchange rate. So, if I want to sell 1 dollar for 200 rupees to someone and that person is willing to pay 200 dollars, then this is okay. However, the transaction should take place on spot. So, this is very, very important. Now, the sale or exchange where 1 amount in dollars is exchanged for an amount in rupees to be paid later, we have said this is not acceptable. And of course, even if the amount of rupees in future is paid over time, this would remain prohibited as well. So, this is slightly more information about these exchanges than the previous module. I want you to spend some time on these fundamental concepts so that you understand the treatment of Islamic credit cards and treatment of risk later on in an Islamic economic framework.