1. Subject: Prohibition of bank interest.

Question:

Is the use of Bank money permissible (Halal) or prohibited (haram)? Is what is taken of it for trade considered Riba or not (i.e. are business loans taken from a bank at a fixed rate of interest considered to be Riba)?

Fatwa:

To take business loans from a bank at a fixed rate of interest, as is the custom now, is Riba which is altogether forbidden. Allah, the Almighty knows best.

Source:

Fatwas by the Egyptian Office of the Mufti, Supreme Council for Islamic Affairs; opinion given by Sheikh Bakri Al Sadafi, Egyptian Mufti, 27 Muhurram 1325 A.H./ 1907 A.D.

2. Subject: Prohibition of investing deposited money for a fixed interest.

Question:

A person asks about the Shari'ah ruling on depositing the legacy of his deceased son's two daughters in a bank for interest.

Fatwa:

Islamic law does not permit the investment of money in bank at a fixed rate of interest because an investment such as this constitutes Riba which is prohibited by the Shari'ah.

Source:

Fatwa by Sheikh Abdel Majeed Saleem, Mufti of Egypt, 1348 A.H. / 1930 A.D.

3. Subject: Interest of bonds is a prohibited Riba.

Question:

If one inherits from his father Cotton Loan Bonds on which the government pays interest, is the accrued considered a prohibited Riba?

Fatwa:

This interest is a type of Riba prohibited by Allah the Almighty in His Holy Book.

Source:

Fatwa by Sheikh Abdel Majeed Saleem, Mufti of Egypt, 1362 A.H. / 1943 A.D.

4. Subject: Taking interest for money deposited in banks is prohibited; it may not be given as aims.

Question:

Is it permitted to take interest for money deposited in banks and give it as alms to the to poor?

Fatwa:

Taking interest for money deposited in banks constitutes Riba and is prohibited. Giving this interest as alms is unacceptable to Allah, the Almighty. He who does so has committed a sin.

Source:

Fatwa by Sheikh Abdel Majeed Saleem, Mufti of Egypt, 1362 A.H. / 1943 A.D.

5. Subject: Practicing work that involves Riba is helping to do something prohibited.

Question:

A question was raised about a person who works as a clerk in the Agriculture Credit. Is this allowed, given that he needs this work for his livelihood and that all banking work is based on interest? Is blame attached to him on this account?

Fatwa:

Undertaking work that is linked to Riba, clerical or otherwise, is helping to do something illegal. This is prohibited by Shari'ah.

Source:

Fatwa by Sheikh Abdel Majeed Saleem, Mufti of Egypt, 1362 A.H. / 1943 A.D.

6. Subject: Investing money by depositing it in a bank in return for interest is not permitted. There are many Islamically sanctioned ways to invest money which are acceptable to Allah.

Question:

A question was raised about depositing money, particularly that which belongs to orphans, in banks for interest.

Fatwa:

Investing money in banks is Riba forbidden by Shari'ah; investing orphans' money in banks is also Riba. There are many Islamically sanctioned ways acceptable to Allah to invest money, such as placing it with reputable investors to be used for legal, limited investment until such a time the money is needed for the purpose it was saved.

Source:

Fatwa by Sheikh Abdel Majeed Saleem, Mufti of Egypt, 1364 A.H. / 1945 A.D.

7. Subject: Depositing money in banks in return for interest is a prohibited Riba, whether or not the banks belong to the government.

Question:

Banks in Egypt give a yearly interest of 7.5%, 8.5% or 13%. Some Ulema (scholars) have given the opinion that such interest is permissible as the transaction is not with individuals but with banks that belongs to the state. What is the ruling concerning this interest?

Fatwa:

Allah, the Exalted, said in Sura Al Baqara (The Cow), Verses 275 and 276: "Those who take usury shall rise up before Allah like men who, Satan has demented by his touch; for they claim that usury is like trading. But Allah has permitted trading and forbidden usury. He that receives an admonition from his Lord and mends his ways may keep what he has already earned; his fate is in the hands of Allah. But he that pays no heed shall be among the people of the Fire and shall remain in it forever. Allah has laid His curse on usury and blessed almsgiving with increase. He bears no love for the ungrateful sinner".

The Prophet, peace be upon him, said:

"Gold for gold; hand by hand, any extra is considered Riba".

From these passages, and others, it is clear that Riba is prohibited, whether it is Riba on delayed payment or as an increment. Depositing money in banks in return for interest has been described by law as a loan for interest. This interest is incremental Riba which is prohibited by Shari'ah. It is evil money from which a Muslim is not allowed to benefit. He must get rid of it by giving it as alms. Saying that this transaction is not among individuals but with banks that belong to the government makes no difference as, legally, these dealings are loans for interest. Nothing in the law distinguishes between Riba among individuals and Riba between individuals and the government. The earning of Muslims must be legal, acceptable to Allah, and above suspicion. Allah, the Almighty knows best.

Source:

Islamic Fatwa, Volume 9, Page 3341, October, 1980 A.D., Sheikh Jadul Haq Ali Jadul Haq, Mufti of the Arab Republic of Egypt.

8. Subject: Borrowing for interest from government institutions or from banks is prohibited because it is Riba.

Question:

The government has allocated 250 million pounds for housing and building loans at 3% interest, with grace period of three years and repayment period of 30 years. A man asks whether it is possible for him to borrow some of this money to build a house on a plot he owns to benefit another Muslim who has no apartment, if he pays back this money under the conditions and guarantees stipulated by the state.

Fatwa:

The Almighty God says in the Sura of Al Imeran, Verse 130: "O believers, devour not usury, doubling its rate many times." His Messenger, peace be upon him, as related by Abu Said, said: God's Messenger, peace be upon him, says: "Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, measure for measure, hand by hand. He who increases it, or demands an increase, is a usurer, both he who takes and he who gives are on the same level." The above was related by Ahmad and Al Bukhari. Muslims unanimously reject Riba in its two forms, delayed payment and incremental, it is legally forbidden as per the text of the Qu'ran, Sunnah and Consensus of jurists. As borrowing from state-owned institutions, and receiving loans from banks, at a fixed rate of interest, such as 3%, is considered to be taking loans for interest, it is, therefore, forbidden. A fixed rate of interest is incremental Riba which is proscribed by Shari'ah. Thus, borrowing for interest fixed at 3%, as referred to in the above question, is forbidden. As the questioner apparently wishes to borrow money at interest to build for the sake of renting or selling the property, rather than out of personal need, this would be an unnecessary involvement in Riba. The profit obtained from such a venture would constitute usury which is forbidden for Muslims who are commanded to seek lawful profits and to avoid all doubtful transactions in accordance with the saying of the Messenger of Allah: "Avoid anything that is suspicious and do that which is not." From what has been stated, the answer to the question is clear. Allah, the Almighty knows best.

Source:

Islamic Fatwa, Volume 10, No. 1301, Page 3561, Rabi' Thani, 1400 A.H. (February, 1980 A.D.), Sheikh Jadul Haq Ali Jadul Haq, Mufti of the Arab Republic of Egypt.

9. Subject: Borrowing for interest from government institutions or from banks is prohibited because it is Riba.

Question:

A lady possessed a sum of money which she put in a bank for interest. She received the interest which is now in her possession. She wishes to know what to do with it, as she has discovered that it is considered to be Riba.

Fatwa:

Allah, the Almighty, says in His Holy Book: "Those who take usury shall rise up before Allah like men whom satan has demented by his touch; for they claim that usury is like trading. But Allah has permitted trading and forbidden usury. He that receives an admonition from his Lord and mends his may keep what he has already earned; his fate is in the hands of Allah. But he that pay no heed shall be among the people of the Fire and shall remain in it forever. Allah has laid His curse on usury and blessed almsgiving with increases. He bears no love for the ungrateful sinner". (Sura Al Baqara, Verses 175 and 276.) It is related by Abu Said that Allah's Messenger, peace be upon him, said: "Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, measure for measure, hand by hand. He who increases it, or demands an increase, is a usurer, both he who takes and he who gives are on the same level." (Reported by Ahmad and Al Bukhari) From this, it appears that usury in its two forms (delayed payment or incremental) is legally forbidden according to the Qur'an, Sunnah and the consensus of all Muslims. Therefore, it is not permissible for the lady, who put the questions, to benefit from this interest, as it is incremental Riba, forbidden by Shari'ah. The way to get rid of such forbidden gain is to give it away as charity to the poor, or to dispose of it in any other philanthropical manner. All Muslims, men and women, must seek permissible gain and avoid everything that is suspected of being forbidden, in obedience to the saying of Allah's Messenger, Peace be upon him. "Avoid anything that is suspicious and do that which is not."

Source:

Islamic Fatwa, Volume 10, No. 1303, page 3565, Ramadan, August 1980 A.D., Sheikh Jadul Haq Ali Jadul Haq, Mufti of the Arab Republic of Egypt.

10. Subject: Depositing money in return for a fixed rate of interest is prohibited by Shari'ah; investing money for actual profits arising out of investment operations is acceptable by Shari'ah.

Question:

The Shari'ah ruling is sought as to the following: a) Interest in general, given at fixed rates for amounts deposited with banks. b) Depositing money in banks without taking an interest. c) Information is requested on the Islamic Faisal Bank an d the Social Nasser Bank. Is interest from the Nasser Bank prohibited or permitted by Shari'ah?

Fatwa:

Islam has prohibited Riba in its two forms: incremental Riba, which is borrowing a definite amount of money from someone at a fixed rate of interest, and delayed payment Riba, i.e. increasing the interest , or estimating it in relation to the period of time or delay in the payment of a loan. This prohibition is absolute, according to the Holy Qur'an, Sunnah, and consensus of all Muslim scholars. Allah, the Almighty, said: "Those who take usury shall rise up before Allah like men whom satan has demented by his touch; for they claim that usury is like trading. ut Allah has permitted trading and forbidden usury. He that receives an admonition from his Lord and mends his may keep what he has already earned; his fate is in the hands of Allah. But he that pay no heed shall be among the people of the Fire and shall remain in it forever. Allah has laid His curse on usury and blessed almsgiving with increases. He bears no love for the ungrateful sinner". (Sura Al Baqara, Verses 175 and 276.) Allah's Messenger, peace be upon him, said: "Gold for gold, hand by hand; any excess is usury." According to these passages, as well as others, usury, (i.e. incremental or delayed payment) is forbidden. Fixed interest on amounts deposited in banks, or in the Post Department Saving Accounts is described by law as a loan for interest. It is, therefore, incremental Riba which is prohibited by Islam. However, depositing cash in banks without interest, in order to preserve it, is allowed, as currency, in itself, is interchangeable, and mixing it with usurious money does not make depositing money forbidden. The investment system, applied in the Islam Faisal bank and in the Social Nasser Bank, is not based on the fixed interest rate system. These banks distribute the profits of their legal investment operations in unfixed amounts on the basis of the profits realized by the project. This is legal in Islam as it corresponds to that which is allowed by Muslim jurists regarding Mudarabaha contracts, and profit/loss sharing partnerships. Muslims must invest their money in legal ways which are not involved with what is prohibited, as Allah, the Almighty, as recorded in the Hadith, will ask every person about his money - how he got it and how he spent it. This ruling is given on the condition that these banks pay the Zakah due on their investments and transactions.

Source:

Islamic Fatwa, Volume 9, No. 1258, Page 3347, January. 1981 A.D., Sheikh Jadul Haq Ali Jadul Haq, Mufti of Arab Republic of Egypt.

 

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