Shariah RFP M1 common mistakes
Shariah RFP M1 · Understand the traps and how to avoid them.
Treating riba as a single narrow item (interest on a loan) and missing the other riba categories - riba al-fadl and riba al-nasi'ah - when analysing a client's cash-flow plan or a proposed murabaha structure.
Candidates revise the textbook definition of riba once and then apply it only to conventional bank interest, so they overlook unequal exchange of the same commodity or deferred settlement in commodity-based transactions in the scenario.
What to do instead
Before answering any scenario question, run a three-part riba checklist: (1) is there an explicit interest charge, (2) is there exchange of identical commodities in unequal amounts (fadl), (3) is there deferment of one counter-value (nasi'ah). Write the checklist result next to each transaction in the case before selecting an answer.
Confusing murabaha with a conventional loan by ignoring the ownership and risk-taking steps: the candidate accepts a structure where the bank never takes possession or bears risk before reselling to the client.
Murabaha looks numerically like cost-plus financing, so candidates focus on the mark-up arithmetic and skip the Shariah conditions - the institution must acquire the asset, own it, bear ownership risk, and disclose cost and profit clearly.
What to do instead
For every financing structure, list the sequence of ownership transfers and mark where the institution bears risk. If the institution's ownership is a legal fiction with no risk, flag the structure as non-compliant and explain which step must be added (actual acquisition, ownership before sale, clear cost disclosure).
Ignoring zakat on the client's full zakatable asset base - treating zakat as only 2.5% of cash or only salary, and missing receivables, trade inventory, gold, and investments held for resale.
Candidates memorise the 2.5% rate and the nisab threshold but do not practise building a zakatable-asset schedule, so they forget which asset classes are included and which are excluded (e.g. a personal residence, tools of trade).
What to do instead
Build a standard zakat worksheet for every case: list cash, bank balances, receivables likely to be recovered, trade inventory, gold and silver, and resale-intent investments; exclude personal residence, personal car, and business fixed assets. Apply 2.5% to the total after deducting short-term liabilities due, and state the nisab basis used.
Applying zakat to the wrong date: using the calendar year or the client's birthday instead of the hawl (one lunar year) from the date wealth first reached nisab.
The hawl is a short definition in the syllabus, and candidates default to the Gregorian year they use in ordinary financial planning, producing an 11-day-per-year error and a wrong due date.
What to do instead
Always state the hawl start date (the day zakatable wealth first equalled or exceeded nisab) and compute the due date on the lunar calendar. When the case gives only a Gregorian date, show the conversion explicitly and note that a lunar year is about 354 days.
Mixing the prohibited elements of an investment screening into one pass: the candidate checks only the business-activity screen and forgets the financial-ratio screen, or applies one school's thresholds without saying which standard is being used.
Screening is taught as a two-stage process, but under time pressure candidates answer on the obvious sector question (alcohol, gambling, conventional finance) and skip the interest-bearing debt and impure-income ratios.
What to do instead
For every screening question, write two labelled lines: business screen (permissible or not) and financial screen (debt-to-assets, interest-bearing securities-to-assets, impure income-to-revenue), each with the threshold and the standard being applied. If the case does not specify a standard, state the assumption and answer consistently with it.
Designing a takaful recommendation that is really conventional insurance: the candidate describes a pool where the participant's contribution becomes the company's premium income with a guaranteed payout, rather than a contribution to a mutual fund with surplus sharing.
Candidates transfer conventional insurance vocabulary (premium, insurer, policyholder) into the answer without checking the Shariah contract types - tabarru' (donation), wakala (agency) or mudaraba - and the surplus distribution mechanism.
What to do instead
In every takaful answer, name the contract structure explicitly (e.g. wakala-bil-ujrah or mudaraba model), state that contributions are donations to a risk pool, identify who bears the risk, and explain how underwriting surplus is shared. Remove the words premium and guaranteed payout from the answer.
Ignoring the order of priorities in estate planning: the candidate distributes the whole estate according to the fixed Quranic shares without first settling funeral costs, debts (including zakat owed and unpaid mahr), and the valid will (wasiyya) limited to one-third.
Fara'id share tables are the most memorisable part of the topic, so candidates jump straight to the fractions and forget that the fixed shares apply only to what remains after prior obligations.
What to do instead
Use a fixed four-step estate template: (1) funeral and burial costs, (2) debts and unpaid obligations, (3) wasiyya up to one-third to non-heirs, (4) distribution of the residue among heirs by fixed shares and residuaries. In every estate question, show the residue figure before quoting any fraction.
Treating a bequest to an heir as valid: the candidate allows a wasiyya to a son or daughter, or allows a bequest above one-third without the consent of the other heirs.
Candidates focus on the one-third cap and forget the separate rule that a bequest to an existing heir is not permitted unless the other heirs consent, so a case with a bequest to a son is marked compliant.
What to do instead
Check bequests on two independent tests: amount (maximum one-third of the net estate after debts) and recipient (not an existing heir unless all other heirs agree after the death). State both tests in the answer and flag any bequest that fails either one.
Recommending a conventional mortgage or interest-bearing savings product because it scores better numerically in the client's plan, without flagging the Shariah prohibition or offering an Islamic alternative.
Candidates fall back on conventional financial-planning habits and optimise for return or cost, treating Shariah compliance as a preference rather than a constraint, which fails the ethical-filter requirement of the module.
What to do instead
Apply Shariah screening before, not after, the numerical comparison. If a conventional product is cheapest, say it is excluded, then compare compliant alternatives (diminishing musharaka, murabaha, ijarah, sukuk, Shariah-compliant funds) on cost and risk, and document the trade-off the client accepts.
Giving a generic answer that names a concept without applying it to the case numbers - for example writing 'the client should pay zakat' or 'the portfolio must be screened' without computing the amount, naming the ratio, or stating the resulting recommendation.
Under exam time pressure, candidates write the definition they revised and move on, but the capstone module marks application: the marker is looking for the figure, the threshold, and the specific action for this client.
What to do instead
Structure each answer as: concept named, rule stated with its threshold or rate, figures from the case applied, and a one-line recommendation. If a number is missing from the case, state the assumption used and carry it through the calculation so the marker can follow the reasoning.