Receiving interest from non-Islamic banks

April 5, 2018 by Admin Posted in All Q&A, Bank Interest, Islamic Laws, Transactions Tagged Bank, Interest, Money, Non-Muslim, Riba, Transactions

Question 168: I would like to ask you questions about the bank transactions in a country like India where the Govt. is non-Islamic.

If somebody keeps a particular amount of money (say one lac of rupees) in a bank for a fixed period of time say 4 years and the deal will be done on a fixed interest rate say 10%. After 4 years he gets the sum of Rs 146,000. Will the extra amount considered to be Haram (Riba) or will it be halal and if it is haram then what do we have to do with this amount of money?
Almost all people have a savings account in the bank and the bank itself gives interest to their clients if they their money idle in the account for many years. Will the extra money considered to be Riba or not
And what if somebody works in these types of banks; is it permissible to work there or not or is there any precaution to be taken?

Answer 168: These are the responses we have received from the offices of the Grand Ayatollahs so far regarding your inquiry: Read More

Taking interest from government organization

February 28, 2018 by Admin Posted in All Q&A, Bank Interest, Islamic Laws, Transactions Tagged Contract, Employee, Exchange, Interest, Investment, Moawaddah, Mudärabah

Question 167: A Pakistani government organization offers interest to their employee in exchange for some money the employee should invest, but with a term in which the probability of returning back their investments is small. Is it permissible to take such interest?

Answer 167: According to some scholars, there would be no problem to take such interest if it is given under a valid legal contracts like Mudärabah (A contract, entered into by two persons on the condition that the stock or Rãs al-Mãl in trade shall belong to one of them, and the labor to another, and in case profit is accrued, it should be divided between both of them. If the whole profit is stipulated to go to the proprietor (of the stock) it is called “Bida’ah, Hibah (donation) moawaddah (exchange contract), advocacy for business or Musharakat (partnership). According to other scholars, it is an example of haram usury.

The grant maraja’ answer to this question is as follows:

Ayatollah Khamenei (ha): There is no problem in it if it is done under moawaddah contract or the like. If you lend it, you are not allowed to take this interest.

Ayatollah Safi Golpayegani (ha): It is impermissible to take interest if you stipulate a condition by which they have to pay back its interest. If they themselves give you the interest there would be no problem to take it.

Ayatollah Makarem Shirazi (ha): Given the supposition made in the questions, taking this interest is considered as haram.

Ayatollah Noori Hamadani (ha): It is considered as a haram act if it is not done under any kind of valid Islamic contracts like Mudarabah and the like.[i]

For further information in this regards, please refer to the following answer:

Index: Rules on taking an interest-based loan before reverting to Islam, answer 293.

Index: Bank Interest / Investment in the Stock Market, answer 604.

[i] . This question has been sent to the office of grand Ayatollahs Khamenei, Safi Golpayegani, Makrarem Shirazi and Noori Hamedani (May Allah grant them long life).

Bank Interest / Investment in the Stock Market

September 18, 2017 by Admin Posted in All Q&A, Bank Interest, Islamic Laws, Transactions Tagged Account, Balance, Bank, Deposit, Interest, Investment, Non-Muslims, Profit, Stock Market, Trading

Question 604: Two questions: 1. I have opened an account in a bank which is owned by momineen. Their account condition states they will give me profit of 4.5 % per annum (profit “Bank Interest” will be credited to my account on a monthly basis) depending on my average balance. Is this allowed as per Sayyid Sistani?

Note i have not asked them for interest. They have advertised this and the percentage is fixed from their side which is subject to annual review and changes according to banks financial profit

2. Is trading shares on stock market halal? Am I entitled to the profit, according to Sayyid Sistani?

Answer 604: A1: If the bank acts as an agent (through a legal contract) on behalf of the client and it is carrying out its contracts in accordance with Islamic laws, there is no problem in taking the interest. However, if it is in the form of a loan it would be haram to lay down a condition for interest and to receive the interest.^[1]

Ayatollah Bahjat (ra): People’s deposits with banks and the interest which is given to them by the banks will be halal provided that it has been in accordance with the Islamic criteria and on the basis of Islamic contracts and agreements. For example, the bank can sell a property to the client on the condition that he will lend some money as a loan to the bank.^[2]

Ayatollah Vahid Khurasani: If the client does not lay down a condition for interest and he does not consider the bank indebted to him, there is no problem in taking the interest even if [he knows that] the bank gives interest.^[3]

According to Sayyid Sistani (ha), it is permissible to deposit money in a bank without prior condition for interest and it is as well permissible to take interest, if the bank in which money is deposited belongs to Muslims. If it belongs to government, it is permissible to take interest provided that half of the interest is given away to poor people (momeneen of them^).[4]

A2: There is no objection in it per se.[5]

Note: It is absolutely permissible to take interest from a non-Muslim bank. Even making a condition for obtaining interest is permissible. Taking a loan with an interest is not permissible unless one takes it with the intention of securing the money after which he considers it as loan given to him on behalf of Hakim Shar’a (Mujtahed).[6]

But, buying shares of a bank that does not practice the Islamic banking system is not permissible, according to Ayatollahs Khamenei, Makarem and Safi Golpayegani.[7]

For further information in this regards, please refer to the following answer:

Index: Receiving interest from non-Islamic banks, answer 168.

[1]. Ayatollah Khamenei, Answers to Religious Questions (Ajwebat al-Istiftaat), question 1926 and 1940; Ayatollah Noori, Tawzih al-Masail, Current Legal Issues; Ayatollah Tabrizi, Istiftaat, question 2120; Ayatollah Makarem Shirazi, Istiftaat, vo.1, question 1377 and 1383 ; Ayatollah Fazel Lankarani, Jami’ al-Masail, vol.1, question 1094 and 1095 and vol.2 question 2003; Ayatollah Saafi, Jami’ al-Ahkaam, vol.2, question 1990 and 1991; extracted from Porsman Software.

[2] . Bahjat, Tawzih al-Masail, issue No. 2283.

[3]. Vahid Khurasani, Tawzih al-Masail, issue No.2850.

[4] . The official website of the office of Sayyid Sistani (ha), rules concerning Interest.

[5] . Ibid, rules concerning Investment.

[6] . Ibid, rules concerning Interest.

[7]. Adopted from answer 1622 IQ.

Rules on taking an interest-based loan before reverting to Islam

March 21, 2017 by Admin Posted in All Q&A, Loan, Transactions Tagged Bank, Interest, Islamic lending company, Loan, Mortgage, Non-Muslim Countries

Question 293: What is the ruling on loans made with interest (interest-based loan) before reverting to Islam? To clarify better my mortgage on my house is a loan that I pay interest on, should I seek an Islamic lending company and transfer my mortgage?

Answer 293: If it is an interest-based loan, it is haram to take it irrespective of whether one takes it from a Muslim or a non-Muslim; from an Islamic state or a non-Islamic state except for when one is in a difficult situation which makes committing a haram act permissible.

Taking a haram loan does not become halal with the permission of a qualified Mujtahid. In order for the recipient of the loan not to commit a haram act, it is necessary that he should take the loan with the intention that it is a transaction without return, even if he knows that he will end up paying the capital as well as the interest. The permissibility of taking an interest-free loan is not restricted to being needy or to an emergency situation.”

To explain further, he who receives the loan should not take it with the intention of paying interest. In his mind, he should have the intention that he is not going to give interest.

Note: Although, taking such interest-based loan is haram, but after that using the money is allowable. I.e. the one, however has already committed the sin, but would be allowed to use the money later.

Since, you were non-Muslim on that time, there would be no sin upon you in what have you already been committed such sins like taking the loan as Islam would forgive the past sins.

As a result, you would be able to use the money and no need to transfer your mortgage.[1]

[1] . Ajwebat al-Isteftaat (Farsi Answers to Religious Queries), vol.2, question 826.

Purchasing something from Haram Rizq

January 26, 2017 by Admin Posted in All Q&A, Transactions Tagged amr bil ma’ruf wa nahy anil munkar, Haram, Livelihood, Money, Purchase, Rizq, Wajib

Question 004: I am a teenager that knows that my father is earning Haram Rizq (money). If something is purchased from that money does it also become haram?

Answer 004: If you are absolutely sure he is earning haram rizq you are not allowed to buy anything from that money. Otherwise, if you are not sure, there would be no problem to use it.

Therefore, buying anything with money earned in a fashion that is haram rizq, makes the thing itself haram.

Note: forbidding others from haram acts, or enjoining them to do their wajib ones, is wajib (obligatory) upon us, because it falls under the category of amr bil ma’ruf wa nahy anil munkar, and this applies to everyone. Thus, carrying this religious duty is also wajib, given that all the conditions are met and that it certainly applies.