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:

We are India based manufacture and export of home furnishing and garments, Allhamdolila in three year since the business has started we have doubled our sales, we are running our business with very small capital, and manage from personal financing. Due to less working capital we some time have to reject big order or keep us away from companies who give big orders, although Allhumdolila we are capable in every aspect to execute there orders.

Till now we have been managing from shot term loan from the family. Now there is a facility from the government rather instruction from the government to the bank to encourage export, there are polices like pre and post export finacing according, over draft, cash and credit limit etc , these facilities given on the basis of the LC but before that the bank needs some kind of security, with these financial facilities Exporters can use the money and start production process, for this bank charges some commission or interest on the amount used from the limit sanction in a year , the bank does not gives the money right away, it gives money after investigating about the company who has open LC by taking an opinion report from a third party special agencies who are into corporate vigilance who give report about the financial strength, business history and creditability record about the company. If the report is positive then only bank transfer payment against LC, there is risk involve even after and during the production process right from production to shipping of goods and if anything goes wrong the order get cancelled, the beneficiary have to pay in the due time

My query is: Can we take benefit from such facilities, is it Islamic if not then what is the other way to get loan from bank specially in country like India where there is no Islamic banking there are no product for Muslim business man. What are the thing we can do to get loan from the bank and other financial institutions, there must be a way out for Muslim businessman who cannot take direct loan from the bank, or do we have to face the difficulties related to business financing just because we don't live in an Islamic country?

 

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Answer:

 

Business Lc bank riba

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.

 

Your Question: …..Can we take benefit from such facilities, is it Islamic if not then what is the other way to get loan from bank specially in country like India where there is no Islamic banking there are no product for Muslim business man.

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.

 

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.

 

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.

 

Dear and beloved brother in Islam, if the transactions with the bank involve or indulge in the elements of ‘riba’ (interest), then without an iota of a doubt, every single manifestation of ‘riba’ is strictly and categorically forbidden for the believers who sincerely fear Allah and the Last Day.

 

Beloved brother, if you do not have the option of sourcing additional capital from lawful sources in the land or nation you live in, you may ask the vendors to give you interest-free credit, or ask the companies who wishes to place the order to give you an advance, or raise funds for your business from your personal means, or from relatives and friends….but to seek to take an advance from a commercial bank (or any other source) on the basis of ‘riba’ would be categorically forbidden for a believer who sincerely fears Allah and the Last Day.

 

Beloved brother in Islam, if you absolutely cannot source funds from lawful means and your inability to do so results in you having no option but to reject those orders….rest absolutely assured that if you let go of such orders which would make you indulge in the ‘haraam’ only because of the fear of violating the prescribed Boundaries of your Lord……. your Lord Most Gracious will not only reward you for your obedience and your piety, but He will provide for you from His Infinite Sources which you or I cannot even begin to contemplate!

 

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