DEALING IN GOODS NOT IN MONEY.

 DEALING IN GOODS NOT IN MONEY.

Money is anything that can be accepted as a means of payment for goods and services in an economic system.  Money has three important functions, namely as a medium of exchange, store of value, and measuring the value of a commodity.However, the conventional banks assume money as a commodity, meaning that, money can be tradable. To simply understanding about what meaning by money as commodity, we divided it into 2 situations:

1. Conventional banks simply lend money to a trader to finance the import of goods by him. 
2.  Islamic bank buy the goods from exporter and then sell the goods to the importer.

From this 2 situation we know that conventional banks deal in money by lend money to trader while Islamic bank deal in goods by sell the goods after buy it from exporter. This is in contrast with Islamic views who do not accept the functions of money as a commodity. That's because money does not qualify as a commodity. According to Sheikh Muhammad Taqi Usmani, here are at least 3 factors that distinguish the money to commodities:-  

1. Money has no intrinsic utility. In contrast to commodities, money cannot be eaten, worn, or used directly. Money can be exchanged only with a commodity, and commodities that will be eaten, worn or used.  
2. Money does not need the quality to determine its value contrast to commodities.  For example; output of the Honda Jazz 2007 to January 2009, the output has a different price. In terms of paper currency USD 100.000 an old issue of paper money in 2007 with a new RM 100.000 published in 2009 has the same purchasing power.
3. The money does not require specification of the validity of transactions, while commodities have specific properties when the validity of transactions. For example, if we want to buy the goods we will choose the things we want to taste us, like color, other complementary accessories. That is, if the seller offers the same goods but they were not in accordance with our tastes may be we will refuse. But it is different with the money that is not specific. For example, for the payment of monthly electricity bills amounting to RM 300. We can pay these bills by using three pieces of money RM 100 or four pieces of money RM 50 plus one sheet of RM 100 and even we can pay these bills with three hundred pieces of RM 1. For the recipient there will be no difference in the value of the three ways above payment. 

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