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Friday, January 30, 2009

Insurance Industries Of Bangladesh

Insurance industry in Bangladesh passed through a century long history of evolution, yet
struggling to achieve its mature stage. After liberation, as part of the nationalization process, the industry was nationalized vide Presidential Order. Subsequently, in the process of denationalization, private sector companies were allowed to operate in the industry side by side with two state-owned corporations. Consequent to that, a good number of insurance companies emerged in a small economy thus resulted in tough and unhealthy competition. Underhand transaction on commission appeared as “open secret” in general insurance business. The Controller of Insurance, even being the regulatory authority, failed to unveil sophisticated control mechanism to bring the industry into a good shape. At certain stage, the agency commission system was abolished to stop underhand dealing between the agent and the policy buyer. The move was, however, failed to eradicate the unethical practices and thus resulted to the reintroduction of commission system in the sector. The life insurance companies also follow aggressive marketing strategy for business procurement, many of which are ended with high policy lapse. It is the general belief of common people that insurance companies are not sincere in making payment and resorts many whimsical reasons for declining claims which are not taken care of while opening policy. Due to the negative attitude, the penetration rate in the industry is still very low (only 0.62% of GDP) even having immense prospects. In order to make the sector vibrant and operationally sound, the Government has taken a number of steps and some are in process with the main objective of taming this wild horse. This article is being written to assess the impact of one of the steps taken by the
Government towards this direction.

Credit Rating of Insurance: What does it mean?
Credit rating of insurance is forming an opinion through the assessment of an insurance
company’s capability to meet its contractual obligations to policyholders and other creditors in timely manner after thorough evaluation of its strengths and weaknesses. The basic philosophy behind credit rating of insurance arises from the fact that the insurance companies are undertaking huge risk against small amount of premium. The risks are so enormous that the entire resources of the company may not be sufficient to handle a single claim in case of general insurance. In view of above, the clients looking for insurance protection should ideally look for insurance claim paying ability of the insurance companies while taking insurance policies. Rating is basically an independent, impartial, professional and best judged opinion regarding the ability and willingness of the insurer to make the policyholders and outsiders obligation when due.

Mandatory Credit Rating of Insurance:
A Breakthrough in the Industry The Department of Insurance made several attempts, as part of the control mechanism, to bring the business environment in the industry, yet few endeavors yielded with fruitful results. However, the circular (No: 21/21/98-376 dated March 12, 2007) of the Chief Controller of Insurance regarding mandatory credit rating for the insurance companies is considered to be the most effective breakthrough in the sector. Under the above directive, all general insurance
companies were instructed to get credit rating with effect from 2007 with mandatory
surveillance at the end of each year. The life insurance companies were directed to have the surveillance rating biannually. However, the two state-owned corporations are still out of the rating net. Shadharan Bima Corporation (SBC), the solitary re-insurer in Bangladesh, is to accept at least 50% of the re-insurable amount of policies of all the general insurance companies by virtue of existing Insurance Act. Thus, the claim paying ability of SBC is very important for all the general insurance companies. On the other hand, Jiban Bima Corporation (JBC) directly participates in policy selling side by side with its reinsurance operation. Considering their immense role and responsibilities towards the development of the sector, SBC and JBC should also come under the framework of rating.
Although the rating of insurance companies is a new phenomenon in the rating industry in
Bangladesh, it experienced tremendous response from the market participants including the insurers themselves. Many of the good rated insurance companies, particularly upper
investment grade entities, started using the rating as a ‘marketing tool’. They are also trying to improve their position based on report of the rating agencies. It has also been observed that the non-investment grade rated companies are asking for the surveillance rating to incorporate the latest developments in the surveillance report with the expectation of improvement in rating. The banks are now more interested in the rating report representing claim paying ability of the companies before assigning policies instead of bargaining for higher discount in premium. The above changes are expected to make positive transformation in the industry. Out of 62 companies, 51 companies have so far been rated constituting 82.26% of the total industry. Of the above, 90.91% are in general insurance industry and 61.11% are in life insurance industry. Credit Rating Information and Services Limited (CRISL), the premier credit rating company of Bangladesh, rated 35 insurance companies (including 9 life insurances) which constitutes 68.63% of the total rated entities. Again, among the rated companies, CRISL awarded rating of 65% general insurances and 81.81% life insurances. Over and above,
66.67% companies achieved investment grade (‘BBB-’ and above) while rest 33.33% obtained non-investment grade (‘BB+’ and below). While analyzing the industry-wise strength of rating, it was found that 81.81% life insurances and 62.60% general insurances achieved investment grade rating. Rating distribution of general insurance companies revealed that 35% companies were in ‘BBB’ category, followed by 32.50% in ‘BB’ category, 22.50% in ‘A’ category and 5% each in ‘AA’ and ‘B’ category. On the other hand, 54.55% of the life insurances achieved ‘A’, 9.09% ‘AA’ and 18.18% each in ‘BBB’ and ‘BB’ category.

Recent Development in the industry:

The insurance industry is now at the final stage of transition. It has been decided to replace the age old insurance laws with Insurance Regulatory Authority (IRA) Ordinance 2008 and Insurance Ordinance (IO) 2008. The Department of Insurance will be abolished by the fivemember Insurance Regulatory Authority headed by the Chairman not below the rank of Government Secretary. For further enhancing the solvency position, the paid up capital for general and life insurance companies have been raised to TK. 400 million and TK. 300 million respectively. The number of directors in the company has also been reduced to 15 from 20 with the participation from the policyholder directors. The new law also introduced mandatory solvency margin for the insurance companies. Besides, the insurance companies will be required to ensure international accounting standard, separate Islamic insurance from conventional ones and put a limit on commission expenses. Moreover, the life insurance companies will be required to make the valuation of liabilities on yearly basis to reveal the real strength of the company. The law also allowed foreign investment in general insurance sector. With the promulgation of the ordinances, the insurance industry will be under the Ministry of Finance from the Ministry of Commerce.

Evaluation Framework:
The credit rating reports of CRISL based on financials upto December 31, 2006 have been
taken into consideration as sample for the framework of evaluation. As said earlier, CRISL
rated 26 general and 9 life insurance companies which respectively constitute 59.09% of the general insurance industry and 50% of the life insurance industry. Out of the above, general insurance companies, 10 are 1st generation, 5 are 2nd generation and the rest 11 are 3rd generation companies. On the other hand, out of the life insurance companies, only 1 is a second generation company and the rest are 3rd generation companies. The appraisal specifically covers the areas of corporate governance, business profile, risk management, financial & operating performance, solvency and liquidity.

Corporate Governance:
Corporate governance is the set of processes, customs, policies, laws and regulations affecting the way a corporation is directed, administered or controlled to perform efficiently and generates long term economic value for its shareholders while respecting the interest of its stakeholders and the society as a whole. The specific areas covered are transparency in disclosure of relevant reliable financial and operational information, information on ownership and control, information on internal processing of management etc. Unlike banks and other financial institutions, the corporate governance in insurance industry is at very early stage of development. The specific areas are delineated below:
a. Ownership Structure, Board and Delegation of Power: The ownership structure of the industry as a whole is concentrated towards a small number of shareholders. The ownership of 34.61% general insurance was found highly concentrated followed by 26.92% moderately concentrated, 30.76% moderately diversified and rest well diversified. On the other hand, ownership structure of 55.56% life insurance companies was found concentrated, followed by 22.22% well diversified and the rest are is equally distributed
to highly concentrated and moderately diversified zone. Out of total 35 sample in the industry, 22 companies had gone for public offerings yet the same couldn’t make any significant breakthrough in the formation of the Board. In most of the companies, the sponsor shareholders dominate the board. Under existing law, the life insurance companies are required to have sponsor directors, shareholder directors and policyholder directors having equal participation in the Board to protect the interest of different stakeholders. However, none of the companies either comply with the law or the sprit
of the law. Most of the companies don’t have any policyholder directors in the board. Couple of companies have policyholder directors where the sponsors become eligible for the same through purchasing policies from the companies. In some instances, it has also been observed that sponsors become the shareholder directors by virtue of having shares from the secondary market. Board and its sub-committees have substantial involvement in operational affairs of the company in addition to formulating policy issues and strategic aspects. The board and its committees of 26.47% companies have high involvement, 58.82% have considerable involvement and rest 14.71% have little involvement in the operational affairs. The above over involvement of the board and its committees results to poor delegation of power to management. There are companies where even a claim of taka five thousand needs to be approved by the Board or its Claim Committee. In some instances, petty expenditures can’t be endorsed by the executives. The delay in decision making is a serious impediment to the growth of the organization. The inherent gap between the entrepreneurs and the professionals is the main obstacle to the growth of the insurance companies.

b. Management Structure and HRM:
Insurance is basically a technical business dependent to a great extent on the quality of
techno-human resources available to form a management team. The denationalization of the sector opened up a new avenue for the top and mid level professional of SBC and JBC to lead the newly established private sector insurance companies. Still, the top level management of many companies constituted of the professionals having exposure in two state owned corporations. Meanwhile, in the passage of evolution, a good number of people entered into the industry. However, the industry is in dearth of knowledgeable human resource base. The main reason behind this is that young qualified people are less interested to build career in the Page 4 of 9 sector as the profession is yet to be socially recognized. Moreover, the career growth depends, to a great extent, on the procurement of business which allows many mediocre people to reach to the peach. This ultimately results in vacuum of knowledgeable professionals in the mid and top level management. Unlike banks and other financial institutions, the human resource management activities of insurance companies aren’t up to the mark. Many of the companies do not have documented ‘service rule’ for its employees. The pay scale of most of the companies isn’t supported by the market scenario. Development of the employee is mainly dependent on ‘on-the-job’ training without having any prospective development plan. Human resource turnover in the industry, on an average, is very high.

c. IT Infrastructure in MIS:
Application of information technology in every phase of the insurance operation is very crucial for both general and life insurance companies. Integrated insurance software provides real time information to the management and technical personnel. Integrated software of underwriting, accounting, reinsurance, claim, etc. provides quick service to the related parties and also extends support for risk analysis, trend analysis of accident, claim behavior, that ultimately help management to take judicious decision. However, the use of IT infrastructure in MIS of the insurance companies is at the early stage of development. 23.53% companies don’t have any IT infrastructure, followed by 35.29% are at the initial stage of IT infrastructure, 32.35% are developing stage while rest 8.83% at advanced stage. Around 60% companies generate most of the MIS and regulatory reports through manual system which is obviously slow and most of the time fails to meet time requirement for fruitful decision making. Sound IT infrastructure requires substantial investment in IT platform that many of the companies are not interested although a modern insurance company can’t think of effective business management without having a well planned IT system.

d. Financial Disclosure:
An insurance company, being a PLC, has a large number of stakeholders including the
policyholders. The disclosure followed by the companies is at minimal and only to the extent required to comply with the regulatory requirement. All the insurance companies in the industry, by and large, follow uniform reporting structure, thus results to almost similar disclosures in the financial statements. However, in case of general insurance some additional disclosures like business class-wise breakdown of gross and net premium, business class-wise sum insured and re-insurance coverage, detailed disclosure of high valued risk assignments, major claims settled and intimated during the period, in-house business support etc. would ensure more accountability and transparency in the business operation. The real financial health of a life insurance company can’t be judged if the actuarial valuation of liabilities is not disclosed. However, most of the life insurance companies including some listed PLC depict the rosy picture of life fund growth without having any indication of liabilities generated against the same. This eventually places stakeholders in fool’s paradise.

Business profile:
a. Business mix:

General Insurance:
Insurance Act permits all the general insurance companies to carry out insurance business
under fire, marine, motor and miscellaneous business categories. However, out of 26 sample companies, 14 companies were found concentrated in marine business with revenue contribution of 36.33% to 62.86% followed by 11 companies in fire business ranging from 32.90% to 55.57% and only one company in motor business having 60.47% contribution in the revenue composition. Among the business segments, fire and motor businesses are considered to be more risky due to high claim experiences. During the period, fire business reported highest average claim ratio (net claim to adjusted net premium) of 30.97%, followed by motor of 29.26%, miscellaneous of 19.06% and marine of only 12.20%. The average expense ratio is found highest of 119.84% in miscellaneous business followed by 93.50% in fire, 58.89% in marine and 57.70% in motor business segment. As per the existing Insurance Act, the management expenses are allowed to be charged on the gross premium rather than net premium. Even with the low retention ratio (net premium to gross premium ratio) in fire (average 37.81%) and miscellaneous (average 22.83%) business categories, the companies allocate management expenses based on the gross premium income resulting to high management expenses for which the segments suffer from underwriting losses. Thus, the combine ratio is dominated by expense ratio rather than the claim ratio. Out of total sample size, 18 companies reported underwriting losses in miscellaneous business, followed by 16 companies in fire business, 4 companies in motor business and 1 company in marine business However, above all, 23 companies reported overall underwriting profit mainly because of the
contribution from the marine segment.

Life Insurance:
Life insurance companies (LICs) offer a variety of products based on the market trend and
changes in demand. LICs, by dint of their business nature, absorb long tail liabilities of the
policyholders with a small amount of premium. Although different companies offer different
policies, more than 95% polices are with-profit policies where the policyholders will get profit along with deposited premium if he survives till the maturity period. The broad head of the product lines are individual life, group life, rural and health insurance. However, out of 9 companies in the sample, only 4 companies have comprehensive product lines including group life and health insurance policies. All the traditional life insurance companies (excepting two dedicated islami life companies in the sample), introduced islami products side by side with their traditional product lines. However, islami products fund were not found ring fenced. The new Insurance Ordinance will not allow the companies to operate traditional and Islami products simultaneously and thus press on a challenge to shift to a particular product within a stipulated time.

b. Marketing Strategy:
General Insurance:
Government regulation provides an unbeatable advantage to the general insurance companies and thus results in the emergence of as many as 43 companies in a small market. The private sector general insurance companies enjoy 50% of the public sector business (PSB) which is considered to be a good source of income. PSB contributed, on an average, 13.69% of the business revenue. Out of the above, 3rd generation companies enjoy the highest PSB of 18.13% (average basis) against revenue, followed by 13.03% by 2nd generation and 9.13% by the 1st generation companies. In-house business (business from the directors) is also found a considerable source of income for the companies. It has been found that 2nd and 3rd generation companies are mostly contributed by the in-house business respectively having 31.58% and 30.51% (on average basis) of the total business revenue. Despite the fact, too many companies in a very small market give rise to unhealthy and unsound competition among the participants which is being reflected in the marketing strategy. It has been observed that 76.45% companies follow aggressive marketing strategy for the procurement of business while 19.23% companies follow cautious strategy and rest only 3.84% companies are
stick to conservative marketing strategy.

Life Insurance:
Life insurance business, in our country, is based on marketing where door-to-door campaign strategy is in practice for collection of new policies as well as for renewal of existing policies. Under the above backdrop, the LICs are fully dependent on large number of field workers called Agents/Employer of Agents etc. appointed for each of the service offices all over the country to collect insurances business/proposals from the prospective clients. All the life insurance companies in the industry follow “selling concept” of marketing where the basic philosophy is “product will be sold not bought”.

Risk Management:
An insurance company, by virtue of its business nature, undertakes the risks of the
policyholders. Management of risks is very crucial as the same is highly correlated with the long run sustainability and operating efficiency of the insurer. Principally, the higher the risk management practice, the lower the risk and the more protection for the stakeholders. The risk management primarily deals with the fortuitous events and their impacts which basically come from the core business activities of the insurance company. In addition, some operational risks and market risks are also associated with, which also need to be addressed.

a. Business Risk Management
General Insurance:
General insurance companies of Bangladesh, by and large, follow traditional business
risk management tool. Most of the companies don’t have any underwriting Manual yet
follows common practice, rules and guidelines as framed by the regulatory authority.
Many of the companies have no regular risk inspection team before underwriting a
policy. Policies other than high valued risk (as framed by the management) are usually
underwritten based on the ‘principle of utmost good faith’. Excepting few instances,
policies underwritten at branch level aren’t turned down by the head office after
appropriate verification thereto, due to immense competition among the companies in
the industry.

Life Insurance:
Life insurances have underwriting rules and guidelines which are printed in the product
rate books. The underwriting requirements (for new policies and revival of lapse
policies) are based on age and sum assured and are consistent with the reinsurer’s
underwriting requirements. Policyholders up-to certain age enjoy taking policy up-to
certain amount of sum assured without having any special medical test; however, full
medical report (FMR) and pathological urine report (PUR) are required for
policyholders exceeding the certain age limit and sum insured. However, it has been
observed that rules and regulations regarding underwriting aren’t strictly followed in
practice. The field level workforces are less interested in proper investigation of the
policyholders as a significant portion of 1st year premium (new policy) is being
absorbed by them in the form of commission.

b. Internal Control Risk
Internal control procedure is an integral part of financial and business processes which
acts as the safeguard of the assets, promotes operating efficiency, and ensures
compliance with applicable policies and regulations and adherence to the prescribed
managerial policies. Most of the insurance companies follow centralized internal control
mechanism. Funding requirements of branches are approved by the head office.
67.64% of the companies have Board Audit Committee yet couples of which are nonfunctional. For establishing internal control mechanism, 91.18% companies have
established internal audit department, however, the function of the internal audit
department is found inadequate mainly because of insufficient human resource. Only a
few companies makes regular branch/service cell audit while a good number of
companies makes necessary inspection/audit as and when required basis.
Performance: Overall macro-economic slow down resulting from change of government, successive devastating natural calamities and price hike in the international market affected the whole insurance sector.

a. Financial Performance
General Insurance:
Overall financial performance of the general insurance companies was found
moderate. On analysis it was found that 15.38% companies revealed poor financial
performance, followed by 30.76% marginal, 46.15% above average and rest 7.71%
satisfactory financial performance. The average gross underwriting margin stood at
43.07% ranging from 59.32% to (43.92%) during the period. Considering the reserve
for unexpired risk, the average net underwriting margin was found at 8.78% ranging
from 24.58% to (77.27%). The average pre tax operating margin was 12.89% having
wide deviation among the companies. The average Return on average asset (ROAA)
and Return on Average Equity (ROAE) respectively stood at 5.54% and 7.98%. The
average return on average investment (ROAI) stood at 8.48% with a very small

Life Insurance:
Unlike general insurances, the financial performance of life insurances are measured
by the surplus generated from the gap between actuarial valuation of liabilities and life
fund. It has been found that average policyholders’ surplus to net premium was 6.66%
ranging from 18.76% to (2.44%). Average surplus on assets stood at 4.53%. Average
incremental surplus to incremental life fund during the period stood at 7.84% (ranging
from 20.79% to -0.02%) indicating moderate growth of surplus against the life fund
generation. Return on assets was also found moderate with an average of 7.82%
among the companies in the sample.

b. Technical/Operating Performance
General Insurance:
The overall technical performance of general insurance companies was also found
moderate. 19.23% companies revealed poor technical performance followed by
23.07% marginal, 42.30% above average and rest 15.38% satisfactory performance.
Average retention ratio was found 56.35% ranging from 30.77% to 78.04%. As we
know, the higher the retention ratio, the higher will be the basic earning power that
ultimately contributes towards profitability. Expenses ratio, on an average was found
70.31% varying from 34.25% to 118.76% among the companies. However, average
claim ratio was found in a tolerable level of 21.78% against the minimum of 0.13%
among the companies. Thus it is evident that combine ratio is mostly dominated by
the expense ratio rather than claim ratio.

Life Insurance:
The overall operating efficiency of life insurance companies depends, to a great extent,
on the control of management expenses, increment of life fund against net premium
written, employment of fund to earning assets, reduction of policy lapse etc. The
overall operating performance of the third generation companies wasn’t found up to
the mark. The average expenses ratio was 64.46% with a minimum of 52.94% to
maximum of 79.57%. The management expenses is found relatively high as most the
companies are passing through growing stage of operation and thus incurring huge
expenses for infrastructure development and promotional activities. Thus, incremental
life fund to net premium is yet to reach to an optimum level with an average of only
39.07%. On an average, 69.87% life fund of the companies is deployed to earning
assets. The situation has further been aggravated due to the discontinuation of policies
(policy lapse) which is considered to the major impediment of the life companies
towards smooth growth. Average policy lapse ratio was 48.87% while the same was
found more than 50% among the third generation companies. Dominance of 1st year
premium in the total premium mix is found acute (average 51.76%) in 3rd generation
companies mainly because of their business expansion and discontinuation of policies.

General Insurance:
Overall solvency position of general insurance companies was found moderate. On
analysis, it was found that 15.38% companies have poor solvency position followed by
23.07% marginal, 42.30% above average and rest 19.23% have satisfactory solvency
position. Solvency position is usually determined by a good number of indicators like
equity base, exceptional loss reserve, technical reserve, internal capital generation,
underwriting leverage etc. The new insurance ordinance re-fixed the minimum paid up
capital of TK. 400 million which will have to be met within a stipulated timeframe.
None in the industry is at comfort zone regarding capital as per new law. A few 1st
generation companies together with the listed third generation companies have paid
up capital of TK. 150 million or more. However, couple of 1st generation companies
enhanced their equity base through generating exceptional loss reserve. Exceptional
loss reserve is a safeguard against big unforeseen losses in future and tax authority
leaves maximum 10% of net premium as the said reserve out of tax net. Many
companies took the advantage, however, average exceptional loss reserve to net
premium ratio stood at 5.61%. Average unexpired risk reserve to net claim stood at
13.97 times indicating sufficient backup of regulatory reserve against net claim.
Internal capital generation is found low with an average of only 8.06% as most of the
companies declared cash dividend during the period. Technical reserve is found below
standard with an average 40.84%. Underwriting leverage (internal funds and external
support against total sum insured), on an average, was found 44.43% indicates
moderate backup against risk underwritten.

Life Insurance:
Unlike general insurances, life insurances absorb the liabilities of the policyholders till
the maturity. Thus, the prerequisite for long run sustainability of a life company is the
creation of life fund from the premium income. An actuary makes the valuation of
future liabilities of the policyholders. The third generation companies are yet to
consolidate their position due to excessive management expenses and policy lapse.
The new insurance ordinance fixed the paid up capital of TK. 300 million to protect the
interest of the policyholders. This will press on a new challenge for the companies. The
actuarial valuation of liabilities to life fund ratio is the most crucial determinant of
solvency. On an average, the ratio was found 93.25% indicating moderate backup.
The average incremental net liabilities to incremental life fund was 91.97% indicating
higher growth life fund than that of liabilities. However, in case of few 3rd generation
companies, the ratio exceeded 100% which is a matter of concern.

The overall liquidity position of the industry, as a whole, is sound. Insurance companies are required to maintain their investment portfolio as per insurance law. The significant portion of the investment portfolio is usually kept with different banks as FDR under different maturity bucket which serves the purpose of liquidity. Insurance industry, as a whole, contributed 4.84% of the total FDR mobilized by the banks as on December 31, 2006. In addition, the companies keep a considerable amount in STD and current account. Couple of companies actively trade in the secondary market and started making profit.

Present and Beyond:
Insurance industry, as said earlier, at the final stage of its transition. Government has taken several steps for revitalizing the sector to make it more vibrant and operationally sound. However, amendments and initiatives can’t make an overnight change in the sector. As we know the Department of Insurance is going to be replaced by an Independent Regulatory Authority yet the same will not be fruitful until the authority is equipped with technocrats at the policy level and adequate human resources at the operation level to take control over the sector. The new regulatory body should discover some mechanism to eradicate underhand commission to reduce the high procurement cost in general insurance business. Professionalism at every level of management is very crucial for overall development in the sector. For efficient and prompt decision making, management should be given sufficient delegation of power. The board should only involve in strategic and policy aspects of the company without looking into the day to day operation. All the insurance companies should have a sound HR policy that will attract the qualified people to choose the profession as a ‘career’ not a mere ‘job’. HR development program should be a part and parcel of regular business operation for the enhancement of skills and development of professionalism. A good number of companies are still struggling for their survival, thus huge cost of IT infrastructure is an additional burden for them. However, awareness should be built for effective use of IT infrastructure in MIS that ultimately will bring positive results in future.
Last but not the least; it is not the responsibility of the regulatory body alone to make
revolutionary change, rather the respective board, the management team and above all the insured should come forward to bring the sector to the global standard. The sooner it
happens; the better is for the stakeholders in particular and the country in general.

The End The author is a Senior Financial Analyst and the Head of Insurance Sector of CRISL.

The author is a Senior Financial Analyst and the Head of Insurance Sector of CRISL.

Wednesday, January 28, 2009

Stock Market Analysis : Mutual Fund [Bangladesh]


Mutual fund of bangladesh stock market is too small.Bangladesh stock market has 16 mutual funds.Largest fund of these is Grameen Mutual fund scheme 2 and the smallest fund are Icb 1st mutual fund and Icb 2nd mutual fund.The volume of Gmfo2 are 125 c taka and 1st and 2nd icb mutual fund are .5 c taka each.

Why a mutual fund should rise or when one investor should invest on mutual fund. A shortcut way to make a success is Ipo .A good company's Ipo result day and opening trading day are the best way to make a huge profit.Buy mutual fund before those day[Minimum 1 week]. Delta brack housing,National housing is the best example.You can see from the image of Aims1.

Wednesday, January 21, 2009




This Surah is named Al-Fatiha because of its subject-matter. Fatihah is that which opens a subject or a book or any other thing. In other words, Al-Fatihah is a sort of preface.


This Surah has a total of 7 verses.

Period of Revelation

It is one of the very earliest Revelations to the Holy Prophet. As a matter of fact, we learn from authentic Traditions that it was the first complete Surah which was revealed to Muhammed (PBUH). Before this, only a few miscellaneous verses were revealed which form parts of Surah Alaq, Muzzammil, Muddathir, etc.


This Surah is in fact a prayer which Allah has taught to all those who want to make a study of his book. It has been placed at the very beginning of the book to teach this lesson to the reader: if you sincerely want to benefit from the Quran, you should offer this prayer to the Lord of the Universe. This preface is meant to create a strong desire in the heart of the reader to seek guidance from the Lord of the Universe, who alone can grant it. Thus Al-Fatiha indirectly teaches that the best thing for a man is to pray for guidance to the straight path, to study the Quran with the mental attitude of a seeker-after-truth and to recognize the fact that the Lord of the Universe is the source of all knowledge. He should, therefore, begin the study of the Quran with a prayer to him for guidance. From this theme, it becomes clear that the real relation between Al-Fatiha and the Quran is not that of an introduction to a book but that of a prayer and its answer. Al-Fatiha is the prayer from the servant and the Quran is the answer from the the Master to his prayer. The servant prays to Allah to show him guidance and the Master places the whole of the Quran before him in answer to his prayer, as if to say, "This is the Guidance you begged from Me."




Why the name AL-BAQARAH? AL-BAQARAH (the Cow) has been so named from the story of the Cow occurring in this Surah (vv. 67-73). It has not, however, been used as a title to indicate the subject of the Surah. It will, therefore, be as wrong to translate the name Al-Baqarah into "The Cow" or "The Heifer" as to translate any English name, say Baker, Rice, Wolf etc., into their equivalents in other languages or vice versa, because this would imply that the Surah dealt with the subject of "The Cow". Many more Surahs of the Quran have been named in the same way because no comprehensive words exist in Arabic (in spite of its richness) to denote the wide scope of the subject discussed in them. As a matter of fact all human languages suffer from the same limitation.


Though it is a Madani Surah, it follows naturally a Makki Surah Al-Fatihah, which ended with the prayer: "Show us the straight way". It begins with the answer to that prayer, "This is the Book (that) . . . is guidance. The greater part of Al-Baqarah was revealed during the first two years of the Holy Prophet's life at Al-Madinah. The smaller part which was revealed at a later period has been included in this Surah because its contents are closely related to those dealt with in this Surah. For instance, the verses prohibiting interest were revealed during the last period of the Holy prophet's life but have been inserted in this Surah. For the same reason, the last verses (284-286) of this Surah which were revealed at Makkah before the migration of the Holy Prophet to Al-Madinah have also been included in it.

Historical Background

In order to understand the meaning of this Surah, we should know its historical background:

  1. At Makkah the Quran generally addressed the mushrik Quraish who were ignorant of Islam, but at Al-Madinah it was also concerned with the Jews who were acquainted with the creed of the Unity of Allah, Prophethood, Revelation, the Hereafter and angels. They also professed to believe in the law which was revealed by Allah to their Prophet Moses (Allah's peace be upon him), and in principle, their way was the same (Islam) that was being taught by Prophet Muhammad (Allah's peace be upon him). But they had strayed away from it during the centuries of degeneration and had adopted many un-Islamic creeds, rites and customs of which there was no mention and for which there was no sanction in the Torah. Not only this: they had tampered with the Torah by inserting their own explanations and interpretations into its text. They had distorted even that part of the Word of God which had remained intact in their Scriptures and taken out of it the real spirit of true religion and were now clinging to a lifeless frame of rituals. Consequently their beliefs, their morals and their conduct had gone to the lowest depths of degeneration. The pity is that they were not only satisfied with their condition but loved to cling to it. Besides this, they had no intention or inclination to accept any kind of reform. So they became bitter enemies of those who came to teach them the Right Way and did their worst to defeat every such effort. Though they were originally Muslims, they had swerved from the real Islam and made innovations and alterations in it and had fallen victims to hair splitting and sectarianism. They had forgotten and forsaken Allah and begun to serve mammon. So much so that they had even given up their original name "Muslim" and adopted the name "Jew" instead, and made religion the sole monopoly of the children of Israel. This was their religious condition when the Holy Prophet went to Al-Madinah and invited the Jews to the true religion. That is why more than one third of this Surah has been addressed to the children of Israel. A critical review of their history, their moral degeneration and their religious perversions has been made; side by side with this the high standard of morality and the fundamental principles of the pure religion have been put forward in order to bring out clearly the nature of the degeneration of the community of a prophet when it goes astray and to draw clear lines of demarcation between real piety and formalism, and the essentials and non-essentials of the true religion.
  2. At Makkah Islam was mainly concerned with the propagation of its fundamental principles and the moral training of its followers. But after the migration of the Holy Prophet to Al-Madinah, where Muslims had come to settle from all over Arabia and where a tiny Islamic State had been set up with the help of the Ansar (local supporters), naturally the Quran had to turn its attention to the social, cultural, economic, political and legal problems as well. This accounts for the difference between the themes of the surahs revealed at Makkah and those at Al-Madinah. Accordingly about half of this Surah deals with those principles and regulations which are essential for the integration and solidarity of a community and for the solution of its problems.

    After the migration to Al-Madinah, the struggle between Islam and un-Islam had also entered a new phase. Before this the Believers, who propagated Islam among their own clans and tribes, had to face its opponents at their own risk. But the conditions had changed at Al-Madinah, where Muslims from all parts of Arabia had come and settled as one community, and had established an independent city state. Here it became a struggle for the survival of the Community itself, for the whole of non-Muslim Arabia was bent upon and united in crushing it totally. Hence the following instructions, upon which depended not only its success but its very survival, were revealed in this Surah

  3. During this period, a new type of "Muslims," munafiqin (hypocrites), had begun to appear. Though signs of duplicity had been noticed during the last days at Makkah, they took a different shape at Al-Madinah. At Makkah there were some people who professed Islam to be true but were not prepared to abide by the consequences of this profession and to sacrifice their worldly interests and relations and bear the afflictions which inevitably follow the acceptance of this creed. But at Al-Madinah different kinds of munafiqin (hypocrites) began to appear. There were some who had entered the Islamic fold merely to harm it from within. There were others who were surrounded by Muslims and, therefore, had become "Muslims" to safeguard their worldly interests. They, therefore, continued to have relations with the enemies so that if the latter became successful, their interests should remain secure. There were still others who had no strong conviction of the truth of Islam but had embraced it along with their clans. Lastly, there were those who were intellectually convinced of the truth of Islam but did not have enough moral courage to give up their former traditions, superstitions and personal ambitions and live up to the Islamic moral standards and make sacrifice in its way.

    At the time of the revelation of Al-Baqarah, all sorts of hypocrites had begun to appear. Allah has, therefore, briefly pointed out their characteristics here. Afterwards when their evil characteristics and mischievous deeds became manifest, Allah sent detailed instructions about them.

Theme: Guidance

This Surah is an invitation to the Divine Guidance and all the stories, incidents etc., revolve round this central theme. As this Surah has particularly been addressed to the Jews, many historical events have been cited from their own traditions to admonish and advise them that their own good lies in accepting the Guidance revealed to the Holy Prophet. They should, therefore, be the first to accept it because it was basically the same that was revealed to Prophet Moses (Allah's peace be upon him).




This Surah takes its name from v. 33. Al-i-Imran, like the names of many other surahs, is merely a name to distinguish it from other surahs and does not imply that the family of Imran has been discussed in it.

The Period of Revelation

This Surah consists of four discourses. The first discourse (vv. 1-32) was probably revealed soon after the Battle of Badr. The second discourse (vv. 33-63) was revealed in 9 A.H. on the occasion of the visit of the deputation from the Christians of Najran. The third discourse (vv. 64-120) appears to have been revealed immediately after the first one. The fourth discourse (vv. 121-200) was revealed after the Battle of Uhud.


Though these discourses were revealed at different periods and on different occasions, they are so inter-linked and so inter-connected in regard to their aim, object and central theme that they make together one continuous whole. This Surah has been especially addressed to two groups-the people of the Book (the Jews and the Christians) and the followers of Muhammad (Allah's peace be upon him).

The message has been extended to the Jews and the Christians in continuation of the invitation in Al-Baqarah, in which they have been admonished for their erroneous beliefs and evil morals and advised to accept, as a remedy, the Truth of the Quran. They have been told here that Muhammad (Allah's peace be upon him) taught the same right way of life that had been preached by their own Prophets; that it alone was the Right Way, the way of Allah; hence any deviation from it will be wrong even according to their own Scriptures.

The second group, the Muslims, who had been declared to be the best Community in Al-Baqarah and appointed torch-bearers of the Truth and entrusted with the responsibility of reforming the world, have been given additional instructions in continuation of those given in the preceding Surah. The Muslims have been warned to learn a lesson from the religious and moral degeneration of the former communities and to refrain from treading in their footsteps. Instructions have also been given about the reformative work they had to perform. Besides this, they have been taught how to deal with the people of the Book and the hypocrites who were putting different kinds of hindrances in the way of Allah. Above all, they have been warned to guard against those weaknesses which had come to the surface in the Battle of Uhud.


The following is the background of the Surah:

  1. The Believers had met with all sorts of trials and hardships about which they had been forewarned in Al-Baqarah. Though they had come out victorious in the Battle of Badr, they were not out of danger yet. Their victory had aroused the enmity of all those powers in Arabia which were opposed to the Islamic Movement. Signs of threatening storms had begun to appear on all sides and the Muslims were in a perpetual state of fear and anxiety. It looked as if the whole Arabian world around the tiny state of Al-Madinah-which was no more than a village state at that time-was bent upon blotting out its very existence. This state of war was also adversely affecting its economy, which had already been badly disturbed by the influx of the Muslim refugees from Makkah.
  2. Then there was the disturbing problem of the Jewish clans who lived in the suburbs of Al-Madinah. They were discarding the treaties of alliance they had made with the Holy Prophet after his migration from Makkah. So much so that on the occasion of the Battle of Badr, these people of the Book syrnpathised with the evil aims of the idolaters, in spite of the fact that their fundamental articles of the Faith-Oneness of Allah, Prophethood, Life-after- death-were the same as those of the Muslims. After the Battle of Badr, they openly began to incite the Quraish and other Arab clans to wreak their vengeance on the Muslims. Thus those Jewish clans set aside their centuries-old friendly and neighbourly relations with the people of Al-Madinah. At last when their mischievous actions and breaches of treaties became unbearable, the Holy Prophet attacked the Bani-Qainu-qa'a, the most mischievous of all the other Jewish clans who had conspired with the hypocrites of Al-Madinah and the idolatrous Arab clans to encircle the Believers on all sides. The magnitude of the peril might be judged from the fact that even the life of the Holy Prophet himself was always in danger. Therefore his Companions slept in their armours during that period and kept watch at night to guard against any sudden attack, and whenever the Holy Prophet happened to be out of sight even for a short while, they would at once set out in search of him.
  3. This incitement by the Jews added fuel to the fire which was burning in the hearts of the Quraish and they began to make preparations to avenge the defeat they had suffered at Bad. A year after this an army of 3,000 strong marched out of Makkah to invade Al-Madinah and a battle took place at the foot of Mount Uhud. The Holy Prophet came out of Al-Madinah with one thousand men to meet the enemy. While they were marching to the battle-field, three hundred hypocrites deserted the army and returned to Al-Madinah, but there still remained a small band of hypocrites among the seven hundred who accompanied the Holy Prophet. They played their part and did their worst to create mischief and chaos in the ranks of the Believers during the Battle. This was the first clear indication of the fact that within the fold of the Muslim Community there was quite a large number of saboteurs who were always ready to conspire with the external enemies to harm their own brethren.
  4. Though the devices of the hypocrites had played a great part in the set-back at Uhud, the weaknesses of the Muslims themselves contributed no less to it. And it was but natural that the Muslims should show signs of moral weakness for they were a new community which had only recently been formed on a new ideology and had not as yet got a thorough moral training. Naturally in this second hard test of their physical and moral strength, some weaknesses came to the surface. That is why a detailed review of the Battle of Uhud was needed to warn the Muslims of their shortcomings and to issue instructions for their reform. It should also be noted that this review of the Battle is quite different from the reviews that are usually made by generals on similar occasions.

Subject: Guidance

This Surah is the sequel to Al-Baqarah and the invitation therein is continued to the people of the Book. In Al-Baqarah the Jews were pointedly invited to accept the Guidance and in this Surah the Christians have particularly been admonished to give up their erroneous beliefs and accept the Guidance of the Quran. At the same time, the Muslims have been instructed to nourish the virtues that may enable them to carry out their obligations and spread the Divine Guidance.



Period of Revelation

This Surah comprises several discourses which were revealed on different occasions during the period ranging probably between the end of A.H. 3 and the end of A.H. 4 or the beginning of A.H. 5. Although it is difficult to determine the exact dates of their revelations, yet it is possible to assign to them a fairly correct period with the help of the Commandments and the events mentioned therein and the Traditions concerning them. A few instances are given below by way of illustration.

  1. We know that the instructions about the division of inheritance of the martyrs and for the safeguard of the rights of the orphans were sent down after the Battle of Uhud in which 70 Muslims were killed. Then naturally the question of the division of the inheritance of the martyrs and the safeguard of the rights of their orphans arose in many families at Al-Madinah. From this we conclude that vv. 1-28 were revealed on that occasion.
  2. We learn from the Traditions that the Commandment about salat during war time was given on the occasion of Zat-ur-Riqa'a, an expedition which took place in A.H. 4. From this we conclude that the discourse containing v. 102 was revealed on that occasion.
  3. The last warning (v. 47) to the Jews was given before the Banu Nadir were exiled from Al-Madinah in Rabi'-ul Awwal, A.H. 4. From this it may safely be concluded that the discourse containing v. 47 must have been revealed some time before that date.
  4. The permission abouttayammum (the performance of ablutions with pure dust, in case no water be available) was given during the Bani-al-Mustaliq expedition, which took place in A.H. 5. Therefore the probable period of the revelation of the discourse containing v. 43 was A.H. 5.

Topics and Their Background

Let us now consider the social and historical considerations of the period in order to understand the Surah. All the discourses in this Surah deal with three main problems which confronted the Holy Prophet at the time. First of all, he was engaged in bringing about an all round development of the Islamic Community that had been formed at the time of his migration to Al-Madinah. For this purpose he was introducing new moral, cultural, social, economic and political ways in place of the old ones of the pre-Islamic period. The second thing that occupied his attention and efforts was the bitter struggle that was going on with the mushrik Arabs, the Jewish clans and the hypocrites who were opposing tooth and nail his mission of reform. Above all he had to propagate Islam in the face of the bitter opposition of these powers of evil with a view to capturing more and more minds and hearts.

Accordingly, detailed instructions have been given for the consolidation and strengthening of the Islamic Community in continuation of those given in Al-Baqarah. Principles for the smooth running of family life have been laid down and ways of settling family disputes have been taught. Rules have been prescribed for marriage and rights of wife and husband have been apportioned fairly and equitably. The status of women in the society has been determined and the declaration of the rights of orphans has been made laws and regulations have been laid down for the division of inheritance, and instructions have been given to reform economic affairs. The foundation of the penal code has been laid down, drinking has been prohibited, and instructions have been given for cleanliness and purity. The Muslims have been taught the kind of relations good men should have with their Allah and fellow men. Instructions have been given for the maintenance of discipline in the Muslim Community.

The moral and religious condition of the people of the Book has been reviewed to teach lessons to the Muslims and to forewarn them to refrain from following in their footsteps. The conduct of the hypocrites has been criticized and the distinctive features of hypocrisy and true faith have been clearly marked off to enable the Muslims to distinguish between the two. In order to cope with the aftermath of the Battle of Uhud, inspiring discourses were sent down to urge the Muslims to face the enemy bravely, for the defeat in the Battle had so emboldened the mushrik Arab clans and the neighbouring Jews and the hypocrites at home that they were threatening the Muslims on all sides. At this critical juncture, Allah filled the Muslims with courage and gave them such instructions as were needed during that period of war clouds. In order to counteract the fearful rumours that were being spread by the hypocrites and the Muslims of weak faith, they were asked to make a thorough enquiry into them and to inform the responsible people about them. Then they were experiencing some difficulties in offering their salat during the expeditions to some places where no water was available for performing their ablutions, etc. In such cases they were allowed to cleanse themselves with pure earth and to shorten the salat or to offer the "Salat of Fear", when they were faced with danger. Instructions were also given for the solution of the puzzling problem of those Mus!ims who were scattered among the unbelieving Arab clans and were often involved in war. They were asked to migrate to Al-Madinah, the abode of Islam.

This Surah also deals with the case of Bani Nadir who were showing a hostile and menacing attitude, in spite of the peace treaties they had made with the Muslims. They were openly siding with the enemies of Islam and hatching plots against the Holy Prophet and the Muslim Community even at Al-Madinah itself. They were taken to task for their inimical behaviour and given a final warning to change their attitude, and were at last exiled from Al-Madinah on account of their misconduct.

The problem of the hypocrites, who had become very troublesome at that time, was involving the Believers in difficulties. Therefore they were divided into different categories to enable the Muslims to deal with them appropriately. Clear instructions were also given regarding the attitude they should adopt towards the non-belligerent clans. The most important thing needed at that time was to prepare the Muslims for the bitter struggle with the opponents of Islam. For this purpose greatest importance was attached to their character building, for it was obvious that the small Muslim Community could only come out successful, nay, survive, if the Muslims possessed high moral character. They were, therefore, enjoined to adopt the highest moral qualities and were severely criticized whenever any moral weakness was detected in them.

Though this Surah mainly deals with the moral and social reforms, yet due attention has been paid to propagation of Islam. On the one hand, the superiority of the Islamic morality and culture has been established over that of the Jews, Christians and mushriks; on the other hand, their wrong religious conceptions, their wrong morality and their evil acts have been criticized to prepare the ground for inviting them to the way of the Truth.

Subject: Consolidation of the Islamic Community

The main object of this Surah is to teach the Muslims the ways that unite a people and make them firm and strong. Introductions for the stability of family, which is the nucleus of community have been given. Then they have been urged to prepare themselves for defence. Side by side with these, they have been taught the importance of the propagation of Islam. Above all, the importance of the highest moral character in the scheme of consolidation of the Community has been impressed.




This Surah takes its name from verse 112 in which the word Mai'dah occurs. Like the names of many other surahs, this name has no special relation to the subject of the Surah but has been used merely as a symbol to distinguish it from other surahs:

Period of Revelation

The theme of this Surah indicates, and traditions support it, that it was revealed after the treaty of Hudaibiyah at the end of 6 A.H. or in the beginning of 7 A.H. That is why it deals with those problems that arose from this treaty.

The Holy Prophet with 1400 Muslims went to Makkah in Zil-Qaadah 6 A.H. to perform Umrah, but the Quraish, spurred by their enmity, prevented him from its performance, though it was utterly against all the ancient religious traditions of Arabia. After a good deal of hard and harsh negotiations, a treaty was concluded at Hudaibiyah according to which it was agreed that he could perform Umrah the following year. That was a very appropriate occasion for teaching the Muslims the right way of performing a pilgrimage to Makkah with the true Islamic dignity, and enjoining that they should not prevent the disbelievers from performing pilgrimage to Makkah as a retaliation for their misbehaviour. This was not difficult at all as many disbelievers had to pass through Muslim territory on their way to Makkah. This is why the introductory verses deal with the things connected with pilgrimage to Makkah and the same theme has been resumed in vv. 101-104. The other topics of this Surah also appear to belong to the same period.

The continuity of the subject shows that most probably the whole of the surah was revealed as a single discourse at one and the same time. It is also possible that some of its verses were revealed at a later period and inserted in this Surah at different places where they fitted in. But there appears to be not the least gap anywhere in the surah to show that it might have comprised two or more discourses.

Occasion of Revelation.

This Surah was revealed to suit the requirements of the changed conditions which were now different from those prevailing at the time of the revelation of Al-i-'Imran and An-Nisa. Then the shock of the set-back at Uhud had made the very surroundings of Al-Madinah dangerous for the Muslims, but now Islam had become an invulnerable power and the Islamic State had extended to Najd on the east, to the Red Sea on the west, to Syria on the north and to Makkah on the south. This set-back which the Muslims had suffered at Uhud had not broken their determination. It had rather spurred them to action. As a result of their continuous struggle and unparalleled sacrifices, the power of. the surrounding clans, within a radius of 200 miles or so, had been broken. The Jewish menace which was always threatening Al-Madinah had been totally removed and the Jews in the other parts of Hijaz had become tributaries of the State of Al-Madinah. The last effort of the Quraish to suppress Islam had been thwarted in the Battle of the Ditch. After this, it had become quite obvious to the Arabs that no power could suppress the Islamic movement. Now Islam was not merely a creed which ruled over the minds and hearts of the people but had also become a State which dominated over every aspect of the life of the people who lived within its boundaries. This had enabled the Muslims to live their lives without let or hindrance, in accordance with their beliefs.

Another development had also taken place during this period. The Muslim civilization had developed in accordance with the principles of Islam and the Islamic viewpoint. This civilization was quite distinct from all other civilizations in all its details, and distinguished the Muslims clearly from the non Muslims in their moral, social and cultural behaviour. Mosques had been built in all territories, prayer had been established and Imam (leader) for every habitation and clan had been appointed. The Islamic civil and criminal laws had been formulated in detail and were being enforced through the Islamic courts. New and reformed ways of trade and commerce had taken the place of the old ones. The Islamic laws of marriage and divorce, of the segregation of the sexes, of the punishment for adultery and calumny and the like had cast the social life of the Muslims in a special mould. Their social behaviour, their conversation, their dress, their very mode of living, their culture etc., had taken a definite shape of its own. As a result of all these changes, the non-Muslims could not expect that the Muslims would ever return to their former fold. Before the treaty of Hudaibiyah, the Muslims were so engaged in their struggle with the non-Muslim Quraish that they got no time to propagate their message. This hindrance was removed by what was apparently a defeat but in reality a victory at Hudaibiyah. This gave the Muslims not only peace in their own territory but also respite to spread their message in the surrounding territories. Accordingly the Holy Prophet addressed letters to the rulers of Iran, Egypt and the Roman Empire and the chiefs of Arabia, inviting them to Islam. At the same time the missionaries of Islam spread among the clans and tribes and invited them to accept the Divine Way of Allah. These were the circumstances at the time when Al-Ma'idah was revealed.


It deals with the following three main topics:

  1. Commandments and instructions about the religious, cultural and political life of the Muslims. In this connection, a code of ceremonial rules concerning the journey for Hajj has been prescribed; the observance of strict respect for the emblems of Allah has been enjoined; and any kind of obstruction or interference with the pilgrims to the Kaabah has been prohibited. Definite rules and regulations have been laid down for what is lawful and unlawful in the matter of food, and self-imposed foolish restrictions of the pre-Islamic age have been abolished. Permission has been given to take food with the people of the Book and to marry their women. Rules and regulations for the performance of Wudu (ablutions) and bath and purification and tayammum (ablutions with dust) have been prescribed. Punishment for rebellion, disturbance of peace and theft have been specified. Drinking and gambling have absolutely been made unlawful. Expiation for the breaking of oath has been laid down and a few more things have been added to the law of evidence.
  2. Admonition to the Muslims. Now that the Muslims had become a ruling body, it was feared that power might corrupt them. At this period of great trial, Allah had admonished them over and over again to stick to justice and to guard against the wrong behaviour of their predecessors, the people of the Book. They have been enjoined to remain steadfast to the Covenant of obedience to Allah and His Messenger, and to observe strictly their commands and prohibitions in order to save them- selves from the evil consequences which. befell the Jews and the Christians who had violated them. They have been instructed to observe the dictates of the Holy Quran in the conduct of all their affairs and warned against the attitude of hypocrisy.
  3. Admonition to the Jews and the Christians. As the power of the Jews had been totally weakened and almost all their habitations in north Arabia had come under the rule of the Muslims, they have been warned again about their wrong attitude and invited to follow the Right Way. At the same time a detailed invitation has also been extended to the Christians. The errors of their creeds have been clearly pointed out and they have been admonished to accept the guidance of the Holy Prophet. Incidentally, it may be noted that no direct invitation has been made to the Majusis and idolaters living in the adjoining countries, because there was no need for a separate address for them as their condition had already been covered by the addresses to the mushrik Arabs.

Subject : Consolidation of the Islamic Community.

In continuation of the instructions about the consolidation of the Islamic Community given in Surah AN-NISA, the Muslims have been directed to observe and fulfill all their obligations: further regulations have been prescribed to train the Muslims for that purpose. They have also been particularly warned as rulers to guard against the corruption, of power and directed to observe the Covenant of the Quran. They have also been exhorted to learn lessons from the failings of their predecessors, the Jews and the Christians, who in their turn have been admonished to give up their wrong attitudes towards the Right Way and accept the guidance taught by Prophet Muhammad (God's peace be upon him).




This Surah takes its name from vv. 136, 138 and 139 in which some superstitious beliefs of the idolatrous Arabs concerning the lawfulness of some cattle (anam) and the unlawfulness of some others have been refuted.

Period of Revelation

According to a tradition of Ibn Abbas, the whole of the Surah was revealed at one sitting at Makkah. Asma, a daughter of Yazid and a first cousin of Hadrat Mu'az-bin Jahl, says, "During the revelation of this Surah, the Holy Prophet was riding on a she-camel and I was holding her nose-string. The she-camel began to feel the weight so heavily that it seemed as if her bones would break under it." We also learn from other traditions that the Holy Prophet dictated the whole of the Surah the same night that it was revealed.

Its subject-matter clearly shows that it must have been revealed during the last year of the Holy Prophet's life at Makkah. The tradition of Asma, daughter of Yazid, also confirms this. As she belonged to the Ansar and embraced Islam after the migration of the Holy Prophet to Yathrab, her visit to the Holy Prophet at Makkah must have taken place during the last year of his life there. For before this, his relations with those people were not so intimate that a woman from there might have come to visit him at Makkah.

Occasion of Revelation

After determining the period of its revelation, it is easier to visualise the background of the Surah. Twelve years had passed since the Holy Prophet had been inviting the people to Islam. The antagonism and persecution by the Quraish had become most savage and brutal, and the majority of the Muslims had to leave their homes and migrate to Habash (Abyssinia). Above all, the two great supporters of the Holy Prophet, Abu Talib and Hadrat Khadijah, were no more to help and give strength to him. Thus he was deprived of all the worldly support. But in spite of this, he carried on his mission in the teeth of opposition. As a result of this, on the one hand, all the good people of Makkah and the surrounding clans gradually began to accept Islam; on the other hand, the community as a whole, was bent upon obduracy and rejection. Therefore, if anyone showed any inclination towards Islam, he was subjected to taunts and derision, physical violence and social boycott. It was in these dark circumstances that a ray of hope gleamed from Yathrab, where Islam began to spread freely by the efforts of some influential people of Aus and Khazraj, who had embraced Islam at Makkah. This was a humble begining in the march of Islam towards success and none could foresee at that time the great potentialities that lay hidden in it. For, to a casual observer, it appeared at that time as if Islam was merely a weak movement; it had no material backing except the meagre support of the Prophet's own family and of the few poor adherents of the Movement. Obviously the latter could not give much help because they themselves had been cast out by their own people who had become their enemies and were persecuting them.


These were the conditions, when this discourse was revealed. The main topics dealt with in this discourse may be divided under seven headings:

  1. Refutation of shirk and invitation to the creed of Tawhid.
  2. Enunciation of the doctrine of the "Life-after-death" and refutation of the wrong notion that there was nothing beyond this worldly life.
  3. Refutation of the prevalent superstitions.
  4. Enunciation of the fundamental moral principles for the building up of the Islamic Society.
  5. Answers to the objections raised against the person of the Holy Prophet and his mission.
  6. Comfort and encouragement to the Holy Prophet and his followers who were at that time in a state of anxiety and despondency because of the apparent failure of the mission.
  7. Admonition, warning and threats to the disbelievers and opponents to give up their apathy and haughtiness. It must, however, be noted that the above topics have not been dealt with one by one under separate headings, but the discourse goes on as a continuous whole and these topics come under discussion over and over again in new and different ways.

The Background of Makki Suras

As this is the first long Makki Surah in the order of the compilation of the Quran, it will be useful to explain the historical background of Makki Surahs in general, so that the reader may easily understand the Makki Surahs and our references to its different stages in connection with our commentary on them. First of all, it should be noted that comparatively very little material is available in regard to the background of the revelation of Makki Surahs whereas the period of the revelation of all the Madani Surahs is known or can be determined with a little effort. There are authentic traditions even in regard to the occasions of the revelation of the majority of the verses. On the other hand, we do not have such detailed information regarding the Makki Surahs. There are only a few Surahs and verses which have authentic traditions concerning the time and occasion of their revelation. This is because the history of the Makki period had not been compiled in such detail as that of the Madani period. Therefore we have to depend on the internal evidence of these Surahs for determining the period of their revelation: for example, the topics they discuss, their subject. matter, their style and the direct or indirect references to the events and the occasions of their revelation. Thus it is obvious that with the help of such evidence as this, we cannot say with precision that such and such Surah or verse was revealed on such and such an occasion. The most we can do is to compare the internal evidence of a Surah with the events of the life of the Holy Prophet at Makkah, and then come to a more or less correct conclusion as to what particular stage a certain Surah belongs. If we keep the above things in view, the history of the mission of the Holy Prophet at Makkah can be divided into four stages.

  1. The first stage began with his appointment as a Messenger and ended with the proclamation of Prophethood three years later. During this period the Message was given secretly to some selected persons only, but the common people of Makkah were not aware of it.
  2. The second stage lasted for two years after the proclamation of his Prophethood. It began with opposition by individuals: then by and by, it took the shape of antagonism, ridicule, derision,, accusation, abuse, and false propaganda then gangs were formed to persecute those Muslims who were comparatively poor, weak and helpless.
  3. The third stage lasted for about six years from the beginning of the persecution to the death of Abu Talib and Hadrat Khadijah in the tenth year of Prophethood. During this period, the persecution of the Muslims became so savage and brutal that many of them were forced to migrate to Habash. Social and economic boycott was applied against the Holy Prophet and the members of his family, and those Muslims who continued to stay in Makkah were forced to take refuge in Shi'b-i-A'bi Talib which was besieged.
  4. The fourth stage lasted for about three years from the tenth to the thirteenth year of Prophethood. This was a period of hard trials and grievous sufferings for the Holy Prophet and his followers. Life had become unendurable at Makkah and there appeared to be no place of refuge even outside it. So much so that when the Holy Prophet went to Ta'if, it offered no shelter or protection. Besides this, on the occasion of Hajj, he would appeal to each and every Arab clan to accept his invitation to Islam but met with blank refusal from every quarter. At the same time, the people of Makkah were holding counsels to get rid of him by killing or imprisoning or banishing him from their city. It was at that most critical time that Allah opened for Islam the hearts of the Ansar of Yathrab where he migrated at their invitation. Now that we have divided the life of the Holy Prophet at Makkah into four stages, it has become easier for us to tell, as far as possible, the particular stage in which a certain Makki Surah was revealed. This is because the Surahs belonging to a particular stage can be distinguished from those of the other stages with the help of their subject matter and style. Besides this, they also contain such references as throw light on the circumstances and events that form the background of their revelation. In the succeeding Makki Surahs, we will determine on the basis of the distinctive features of each stage, and point out in the Preface, the particular stage in which a certain Makki Surah was revealed.

Subject : Islamic Creed.

This Surah mainly discusses the different aspects of the major articles of the Islamic Creed: Tawhid, Life-after-death, Prophethood and their practical application to human life. Side by side with this, it refutes the erroneous beliefs of the opponents and answers their objections, warns and admonishes them and comforts the Holy Prophet and his followers, who were then suffering from persecution. Of course, these themes have not been dealt with under separate heads but have been blended in an excellent manner.




This Surah takes its name from vv. 46-47 in which mention of A'araf occurs.

Period of Revelation

A study of its contents clearly shows that the period of its revelation is about the same as that of AL-AN'AM, i.e., the last year of the Holy Prophet's life at Makkah, but it cannot be asserted with certainty which of these two was sent down earlier. Anyhow the manner of its admonition clearly indicates that it belongs to the same period. As both have the same historical background the reader should keep in view the preface to AL-AN'AM.

Topics of Discussion - Subject : Invitation to the Divine Message

The principal subject of this surah is "invitation to the Divine Message sent down to Muhammad" (Allah's peace be upon him), which is couched in a warning. This is because the Messenger had spent a long time in admonishing the people of Makkah without any tangible effect on them. Nay, they had turned a deaf ear to his messige and become so obdurate and antagonistic that, in accordance with the Divine Design, the Messenger was going to be commanded to leave them and turn to other people. That is why they are being admonished to accept the Message but, at the same time, they are being warned in strong terms of the consequences that followed the wrong attitude of the former people towards their Messengers. Now that the Holy Prophet was going to migrate from Makkah the concluding portion of the address has been directed towards the people of the Book with whom he was going to come into contact. This meant that the time of migration was coming near and the "invitation" was going to be extended to mankind in general, and was not to be confined to his own people in particular as before. During the course of the address to the Jews, the consequences of their hypocritical conduct towards Prophethood have also been pointed out clearly, for they professed to believe in Prophet Moses but in practice opposed his teachings, disobeyed him and worshipped falsehood and consequently were afflicted with ignominy and disgrace.

At the end of the Surah, some instructions have been given to the Holy Prophet and his followers for carrying out the work of the propagation of Islam with wisdom. The most important of these is that they should show patience and exercise restraint in answer to the provocations of their opponents. Above all, they have been advised that under stress of the excitement of feeling, they should not take any wrung step that might harm their cause.


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