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:

Dear Brother,

 

i was impressed by your reasoning, apart from your thoughts on Imamat. I dont agree with your thoughts regarding the silsila-e-imamat.

 

Anyways, my question to you is as follows:

 

Interest in islam is haraam. Therefore working with the Banks is also haraam, because their transactions are based on interest i.e. they put a charge on the money that they lend.

 

now if we look at how the business is conducted througout the world including the muslim community, it is a common practise that a seller charges different prices for cash and credit terms of payment. Is'nt this a form of interest to charge somebody for deffered payments.?

 

regards

 

(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:

 

Interest on differed payment

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 no one (no idol, no person,  no grave, no prophet,  no imam,  no dai,  nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad(saws) is His slave-servant and the seal of His Messengers.

 

Q-1: i was impressed by your reasoning, apart from your thoughts on Imamat. I dont agree with your thoughts regarding the silsila-e-imamat.

Beloved brother in Islam,  our duty is only to state what is declared in the Quran and Sunnah; to agree or disagree with its teachings and guidance is a choice each individual will have to make for himself. 

 

We humbly urge you to provide us with the proof of the so-called belief of the ‘silsila-e-imamat’ from the Quran and Sunnah;  and Allah is our witness,  if proven from the Quran and Sunnah,  we will humbly submit to it.   But if the belief is not from the Guidance and Teachings of the Quran and Sunnah,  then the believers, who truly believe in Allah and the Last Day, must abstain from all beliefs which are against the clear Guidance and Teachings of Allah and His Messenger (saws).

 

Q-2: Interest in islam is haraam. Therefore working with the Banks is also haraam, because their transactions are based on interest i.e. they put a charge on the money that they lend.

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.

 

Interest is a part of ‘riba’ or usury,  and ‘riba’ has been specifically declared as haraam by the All-Knowing, All-Wise Lord of the Worlds. 

 

Q-2A: Therefore working with the Banks is also haraam, because their transactions are based on interest i.e. they put a  charge on the money that they lend.

The institution of banking by itself is not declared haraam by Allah and His Messenger (saws);  but it is the institution of ‘riba’ which is declared haraam!   Thus if any bank or financial institution abstains from ‘riba’ and interest in their dealings and adheres to the laws of Shariah, it will be considered halaal.   There are many Islamic banks in the world today who adhere to the principles of Shariah,  and it will be considered absolutely halaal to work in these banks.

 

Al-Tirmidhi Hadith 2829        Narrated by Hadrat Ali ibn AbuTalib (r.a.)

Hadrat Ali (r.a.) said he heard Allah's Messenger (saws) curse those who took ‘riba’, those who paid it, those who recorded it, and those who refused to give sadaqah. And he used to prohibit wailing.

 

In light of the above hadith narrated by Hadrat Ali (r.a.), it would indeed be forbidden for a believer, who truly believes in Allah and the Last Day, to work in a conventional bank which deals in interest.

 

Q-3: now if we look at how the business is conducted througout the world including the muslim community, it is a common practise that a seller charges different prices for cash and credit terms of payment. Is'nt this a form of interest to charge somebody for deffered payments.?

Sahih Al-Bukhari Hadith 1.1  Narrated by Hadrat Umar bin Al Khattab (r.a.)

I heard the Messenger of Allah (saws) saying, "The reward of deeds depends upon the intentions, and every person will get the reward according to what he has intended.”

 

It all depends on the intentions of the seller or trader.  If he offers a different price for cash and a different price for credit,  and his intention is to charge ‘interest’ on the credit payment;  it would indeed be a ‘haraam’ transaction for the seller.  

 

But say a trader has a product to sell for $100.00 on payment terms of 30 days credit;  and someone offers him $90.00 for cash and the seller accepts the offer,  there is absolutely no harm in such a transaction and it will be considered absolutely halaal.  

Not only will the trader get his money immediately which he may employ to buy more merchandise,  but he will not take the risk of the buyer defaulting on his payment.  If the trader offers a discount for cash payments in such a situation,  there is absolutely no harm and it will be considered a valid transaction in the sight of Shariah.

 

But if a trader offers a product for $100.00 for cash,  and $110.00 for three months payment,  and $120.00 for 6 months payment, etc.; and his intention to charge interest;  then such a transaction would not be legal in the sight of Shariah for the trader. 

 

All deeds will depend upon the intention of the person.

 

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

 

Your Brother in Islam,

 

 

Burhan