Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Salamualaikum brothers may Allah reward u here and in the hereafter for the good job. My wife wants to go to the bank for borrow money for buy a house and then sell the house for pay the bank what she has borrow. Is this haraam? 

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Answer:

Riba in trading

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

If the bank your wife wishes to borrow the funds from is a Shariah-compliant bank or financial institution which does not deal in ‘riba’ or interest, the transaction would be deemed lawful and halaal.

But if the bank is a conventional bank which deals in ‘riba’ or interest, without an iota of a doubt, to take a loan from such a bank would be absolutely unlawful and haraam in the Sight of Shariah Law and in the Sight of Allah Subhanah.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:

But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch. They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam. Henceforth, if one abstains from taking ‘riba’ after receiving this admonition from his Lord, no legal action shall be taken against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after this, he shall go to Hell, where he shall abide for ever! Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:

That they took ‘riba’, although they were forbidden. And that they devoured men’s substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!

Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib

Ali heard Allah's Messenger (saws) invoke the curse of Allah on those who took ‘riba’, those who paid it, those who recorded it, and those who refused to give sadaqah. And he (saws) used to prohibit wailing.

Allah and His Messenger (saws) have strongly condemned the concept of ‘riba’ and declared it absolutely ‘haraam’ for the believers. Without an iota of a doubt, the concept of conventional bank ‘interest’ is a form, manifestation, and part of ‘riba’ or usury, and thus any transaction based or done on the concept of ‘interest’ would be considered absolutely forbidden for those who sincerely believe in Allah and the Last Day.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan