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:

Assalaamolaikum,
I am in gulf since last few years.have not kept anything in terms of investment which gives interest.But I am realising that if I have some expansion project and I need finance,even islamic banks do the calculations like other banks and the repayment amount comes to almost same as interest being charged by other banks.

What is your view about taking bank loan?
We know before hand as to how much amount will go as interest.
If we take that amount out from the profit and give to needy isn`t it o.k.?Although I do agree that one is not entitled of any sawab earned from charity of interest money but then as current situation is,it can be viewed as practical choice.
Take loan,do business,repay loan and take out interst amount paid from profit!!!!

I read your view about GIVING BRIBE in which you said that if situation is such that things can`t move UNLESS ONE PAYS BRIBE THAN DO IT.The ONUS is on person receiving the bribe and not on one who is forced to give the bribe...

Here also,
I am not taking interest from anybody.
But if I have to take loan,I have to pay interest.
Let the onus be on them....

would await your reply because I see so many oppertunities going by ONLY BECAUSE I DON`T HAVE CASH IN HAND.Otherwise I am confident of getting much more returns than what I will give to the bank as interest.....

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

Answer:

Concept of riba and trade

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.

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)!

Allah Says in the Holy Quran Chapter 3 Surah Ale-Imraan verses 130-132:

130 O ye who believe! Devour not ‘riba’ doubled and multiplied; but fear Allah; that ye may (really) prosper.

131 Fear the Fire which is prepared for those who reject faith.

132 And obey Allah and the Messenger; that ye may obtain mercy.

Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib

Ali said he heard Allah's Messenger (saws) invoke the curse of Allah on those who took usury, those who paid it, those who recorded it, and those who refused to give sadaqah.

To maintain and develop a fair balance in a society, Islam has Commanded and guided that the division and distribution between the two parties of ‘capital’ and ‘labor’ both have a fair share for their efforts. The evil system of ‘riba’ (interest, usury, etc.) places an absolutely unjust, unfair, and unbalanced burden upon the ‘labor’ while protecting only the one who possesses the ‘capital’!

Every type and form of injustice is absolutely abhorred, loathed, and severely disliked by the Lord All-Mighty, All-Just….and the unjust concept and system of ‘riba’, where one party is protected at the cost of another, is considered an absolute abomination in the Sight of the Lord Most Just, Most Supreme.

Allah Says in the Holy Quran Chapter 30 Surah Rome verse 39:

39 That which ye lay out for ‘riba’ through the property of (other) people will have no increase with Allah: but that which ye lay out for charity seeking the Countenance of Allah (will increase): it is these who will get a recompense multiplied.

Allah Says in the Holy Quran Chapter 2 Surah Baqarah verse 276:

276 Allah will deprive ‘riba’ of all blessings, but He will give increase for deeds of charity: for He loveth not creatures ungrateful and wicked.

Dear and beloved brother in Islam, every single type, derivation, and manifestation of the unjust system of ‘riba’ (including usury, interest, etc.) is absolutely and categorically forbidden for the believers who sincerely believe, trust, fear, and have faith in Allah and the Last Day…..thus let no one convince you otherwise!

Your Question: ….even islamic banks do the calculations like other banks and the repayment amount comes to almost same as interest being charged by other banks.

Beloved Brother in Islam, all the good Islamic banks and financial institutions have a Shariah Board of eminent scholars who are proficient in the laws of Islamic Economics and approve the principles behind every transaction or dealing of these banks. If an Islamic Bank or Islamic Financial Institution which is approved by the Central Bank of a Muslim Nation is offering a service, it would be safe for the believers to assume that their products would be halaal and permissible in its essence.

Most people are so used to the conventional interest-based banking system, that in their ignorance of the laws of Islamic Economics they may at times accuse the Islamic Financial Institutions of dealing in interest or ‘riba’ with just a different name.

A simple example can be cited to make the concept of ‘haraam’ and ‘halaal’ clearer. If one marries a woman and satisfies his pleasure, it is considered ‘halaal’ and is a virtue in Islam. But if one does not marry a woman and satisfies his pleasure with her, it is considered ‘haraam’ and a huge sin in Islam! Both associations inherently satisfy the carnal pleasures of man, but the difference between them is a one-page or a simple verbal legal contract of marriage!! I have heard some people say, what is the difference? But you and I both know, there is a huge difference in the reward and sin between the two acts, although both can be termed similar in some qualities. But Allah has made marriage ‘halaal’ and fornication and adultery ‘haraam’.

Similarly, although it may seem to some who are ignorant of the laws of Islamic Economics that because the Islamic Bank charges a ‘fee’ or ‘profit’ instead of ‘interest’, there is no difference in the permissibility of the transaction! But the truth is that because of the nature of the contract made by the Islamic Bank their transaction would be Shariah-compliant and interest-free, and thus halaal in the sight of Shariah and Allah Subhanah, and the interest-based transaction of a conventional bank would be considered absolutely illegal and haraam.

Dear Brother in Islam, there are several good Islamic banks and Islamic Financial Institutions, that adhere to the Shariah in their financial transactions. If these Islamic financial institutions are not 100% Islamic in some people’s view, brother, you will at least agree that they are trying to work towards the right way as ordained by Shariah. Islamic banking is still in its infancy, and if believers and brothers like you and us do not help and support them; we cannot expect the pagans and the disbelievers to come and help them! The thing is brother, the world is so used to the forms of conventional interest-based banking, that it is almost impossible to not draw a comparison between the two forms of banking or financing.

Besides, all Islamic Banks have Shariah boards, with eminent scholars who approve each and every transaction or deals done by these Islamic institutions. There is absolutely no doubt that conventional banking is interest-based, and therefore haraam. If one genuinely believes that the current Islamic Banks are no better or different than interest-based conventional banks in their dealings, and one has the ability to abstain from seeking a loan from either, then without an iota of a doubt, that would be safest and purest. But if one does not have an option and genuinely requires to take out a loan; he should obviously opt to take it from sources which claim they are lawful…..at least that way he will be able to present an excuse in the Court of Allah Subhanah that he strove and tried to do what was lawful as opposed to what was clearly unlawful.

Your Statement:….even islamic banks do the calculations like other banks and the repayment amount comes to almost same as interest being charged by other banks.

Beloved brother, even if the charges by the Shariah-compliant financial institutions were twice or three times as much charged by the conventional interest-based banks, the transaction done under Shariah-compliant terms would be deemed lawful, and the transaction done under conventional interest-based terms would be absolutely unlawful in the Sight of Allah Subhanah!

Your Question: What is your view about taking bank loan?

If one has an absolutely genuine need, the guidance of Islam does not prohibit the believers from seeking a loan from a bank or from any other means…..provided the loan does not transact or demand any ‘riba’ or interest; for that then would be in clear and manifest transgression of the Boundaries of Allah Subhanah.

Thus it is not the taking of the loan which is considered unlawful in Islam, but under what terms and conditions a loan is taken and repaid which would determine its permissibility/impermissibility in the Sight of Shariah.

Your Question: ….If we take that amount out from the profit and give to needy isn`t it o.k.?

Allah Says in the Holy Quran Chapter 30 Surah Rome verse 39:

39 That which ye lay out for ‘riba’ through the property of (other) people will have no increase with Allah: but that which ye lay out for charity seeking the Countenance of Allah (will increase): it is these who will get a recompense multiplied.

Allah Says in the Holy Quran Chapter 2 Surah Baqarah verse 276:

276 Allah will deprive ‘riba’ of all blessings, but He will give increase for deeds of charity: for He loveth not creatures ungrateful and wicked.

Sahih Muslim Hadith 2214 Narrated by Abu Hurayrah

Allah's Messenger (saws) said: ‘O people, Allah is Good and He, therefore, accepts only that which is good’

The seemingly charity which one gives from unlawfully earned wealth has absolutely no acceptance whatsoever in the Sight of Allah Subhanah, for Allah Subhanah is Good and Pure and He accepts only that which is Good.

Your Statement: ……Take loan,do business,repay loan and take out interst amount paid from profit!!!!
Although it does not befit the believers to condone whatsoever the abomination of ‘riba’ which the Lord All-Wise has categorically declared as unlawful….lets assume only for the sake of argument, that ‘take-loan, do-business, repay loan, make-profits’ is one scenario…..what about the equally realistic scenario where one takes out a loan with the intention to do business and make a huge loss????

That is when real ‘teeth’ and ‘poison’ of the abomination of ‘riba’ are unveiled, and the person has to pay off the loan (and the accrued interest, of course!) even if he has to sell all his possessions!!! The injustice and oppression of the ‘riba’ based system enshrines that not only is the capital of the creditor protected, even the interest on his capital is ‘sucked-out’ from the debtor, absolutely regardless of whether the debtor makes a profit or loss!

Al-Tirmidhi Hadith 2827 Narrated by Abdullah ibn Mas'ud

Allah's Messenger (saws) said, "Even though usury be (or promises) much, it leads in the end to penury!"

It is precisely to protect one from such injustice and oppression that the guidance of Islam wisely declares the system of ‘riba’ categorically unlawful….but rather the All-Knowing All-Wise Lord guides the believers towards the lawful ‘trade’ where the risks and rewards are shared between the elements of capital and labor.

Your Statements: ……Here also, I am not taking interest from anybody. But if I have to take loan,I have to pay interest. Let the onus be on them....

Beloved brother, if one studies the verses of the Glorious Quran, Allah Subhanah has time and again, and in extremely severe terms warned the believers against the ‘taking’ or ‘consuming’ of riba…..and guided and encouraged those who are blessed with abundance not to hoard their wealth and double and re-double it through the unlawful institution of ‘riba’, but rather invest their wealth in the lawful institution of trade and thus ‘share’ its profits with the segment of labor.

Without an iota of a doubt brother, the main ‘onus’ and blame is on the party which takes or consumes ‘riba’…..but the one who facilitates or encourages or participates in this system of ‘riba’ will also share its appropriate blame and sin for indulging in the unlawful.

Your Statement:…..would await your reply because I see so many oppertunities going by ONLY BECAUSE I DON`T HAVE CASH IN HAND.Otherwise I am confident of getting much more returns than what I will give to the bank as interest.....

Allah Says in the Holy Quran Chapter 31 Surah Luqmaan verse 34:

34 Verily the knowledge of the Hour is with Allah (alone). It is He Who sends down rain and He Who knows what is in the wombs. Nor does anyone know what it is that he will earn on the morrow: nor does anyone know in what land he is to die. Verily with Allah is full knowledge and He is acquainted (with all things).

Allah Says in the Holy Quran Chatper 13 Surah Raad verse 26:

26 Allah doth enlarge or grant by (strict) measure the sustenance (which He giveth) to whom so He pleaseth. (The worldly) rejoice in the life of this world: but the life of this world is but little comfort in the Hereafter.

Sahih Al-Bukhari Hadith 9.546 Narrated by Abdullah bin Masud

Allah's Messenger (saws), the true and truly inspired, narrated: "The creation of everyone of you starts within forty days and forty nights in the womb of his mother. Then he becomes a clot of thick blood for a similar period (40 days) and then he becomes like a piece of flesh for a similar period. Then an Angel is sent to him (by Allah) and the Angel is Commanded to write four things: his (amount of) sustenance, his (date of) death, his deeds, and whether he will be wretched or blessed, and then the soul is breathed into him.’

The amount of sustenance one will earn in one’s lifetime is not dependant on oneself or one’s abilities to ‘strike’ at (lawful or unlawful) opportunities that come his way; but the sustenance of each and every one in creation is directly as a result of the Divine Decree and the ‘Qadr’ and distribution of the Lord Most Gracious! Allah is our witness brother, the exact sustenance and livelihood of each and every human being in creation is recorded by Divine Decree in one’s fate even when one is only a mere fetus in one’s mothers womb!!!....And Allah is our witness brother, if all the men and all the jinn were to strive all together to increase (or decrease) even 1-cent from the sustenance Decreed unto one from their Lord they would not be able to do so!

Al-Tirmidhi Hadith 79 Narrated by Umar ibn al-Khattab

Umar heard the Prophet (saws) say: 'If you put your faith completely in Allah, He will arrange for your sustenance in the same way as He provides for the birds. They go out in the morning with their stomachs empty, and each returns (with their hunger) satisfied in the evening.'

Although the nature of man is inclined towards the abundance of wealth, The Lord All-Just will never ask or take an account from anyone on that Inevitable Day of Judgment regarding the amount of wealth one made or collected….but what each person will be asked and will have to give an accounting for in the Presence of their Lord Most Majestic is ‘how’ they earned their wealth (lawfully? or unlawfully?), and ‘where’ did they spend their wealth.

Al-Tirmidhi Hadith 5218 Narrated by Abud Darda

Allah's Messenger (saws) said, "The sun does not rise without having on either side of it two Angels who declare: 'O people, come to your Lord! What is little and sufficient is better than what is abundant and causes negligence.'"

Thus in conclusion brother, strive your utmost to earn as much as you wish….but make absolutely sure that you earn your wealth from within the prescribed limits and boundaries of the Lord Most Supreme, Most Majestic; and without an iota of a doubt, ‘riba’ is beyond and in manifest transgression of the prescribed Boundaries of the Lord Most High.

If one trusts, obeys, and follows the guidance and commands of Allah and His Messenger (saws), one can be assured of never ever being misled; but if one believes, obeys and follows any other guidance, other than that of Allah and His Messenger (saws), one can be assured of being led astray.

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