Questions and answers on riba Part 2

THE PROHIBITION OF RIBA IN THE QUR’AN AND SUNNAH

Question: Can a Muslim maintain a checking account in a bank?

Answer: In my opinion - Yes! Checking accounts do not normally pay interest. One should, however, make sure with one's bank. One should not, however, maintain an average monthly balance in a checking account greater than the amount needed to clear whatsoever checks may be written out each month. There are two reasons for this: firstly, the bank would lend your money on interest and you would thus be making a contribution (which could have been avoided) towards maintaining the System of riba banking; secondly, paper money is riba, it will collapse one day according to the prophecy of the Prophet (s). Muslims should take all possible steps to protect themselves from that crash. One way they can do that is to keep the minimum currency possible in paper money. I hope it will be possible for us to mint gold and silver coins one day. When that is done then currency can be stored in dinars and dirhams. When the crash occurs, those whose savings are kept in dinars dirham will suffer no loss!

Question: Can a Muslim rid himself of riba money through giving it in charity?

Answer: No! What is haram for a Muslim is also haram, for his brother.

Question: Can riba money he given when donations are being made for the masjid?

Answer: No! Not even the pagan Arab, who worshiped idols would accept riba money for the masjid al-haram (when the kaaba was being rebuilt before the call of Islam).

Question: Well then, if riba money cannot be used for any personal benefit, and if it cannot be given in charity, what should we do with it?

Answer: This is, my reply to a letter I received on the subject from a Muslim sister who had made an investment prior to entering into Islam and had realized some return on the investment. She wanted to know whether the money she had made was riba and if it was riba, then what could she do with it:

Dear Sister ....

Thank you for your letter. It warms my heart to find such fear of Allah as way revealed in your letter. I am also so very happy that the booklet on 'The Importance of the Prohibition of riba in Islam' should have provoked such a positive development in your own life. Alhamdu lillah!

Your investment is such that while the amount of profit can fluctuate, there is no corresponding possible of loss. Such a transaction is not ba‘i (business or trade). It is clearly riba. You are therefore involved in very great sin and should take immediate steps to get out of it. If you committed the sin in a state of ignorance, and then took immediate steps to correct yourself as soon as you learnt of the sin, then you would have fulfilled one of the requirements for the forgiveness of Allah i.e. tauba.

How can you dispose of the riba money which has accumulated through this investment? Firstly, it cannot be used for your own personal benefit. Secondly it cannot be given to others as charity since what is haram for you (riba) is haram for all of mankind.

Perhaps the only possibility open to you (i.e. for disposal of the riba money), which may also enhance your chances of being forgiven by Allah is the following;

The enemies of Allah are waging war against all of mankind, in general and against Muslims in particular, with riba in that state of war which now exists in the economic life of mankind because of riba, it might, perhaps be permissible to use riba money to fight riba!

If you accept our opinion you may use that riba money which has accumulated from your investment to print books on riba for free distribution. When people read such books and then make the effort to free themselves from the great sin of riba, it is possible that Allah may forgive you your great sin of entering into riba.

And Allah knows best.

This is my opinion. It is also the opinion of my brother Shaikh Imam Alfahim Jobe. whom I have consulted. We may be right. We may also be wrong. And Allah knows best.

I remain,

your brother-in-Islam.

I.N.H

Question: Can a Muslim participate in a pyramid scheme of marketing; i.e. you market a commodity for a company and you get a commission for recruiting a customer? Or your masjid gets a commission for your recruiting a customer?

Answer: If the customer is targeted on the basis of friendship, or because of his sense of loyalty to his masjid or Islamic Center etc., then the customer's business decision to purchase a particular commodity (such as subscribing to a long distance telephone company) will be made on the basis of considerations not all of which belong to a free market.

A commodity should compete in the market in fair and free competition. An exploitation of ties of friendship; or love for one religion as a marketing strategy, represents a corruption of the free and fair market. Such a marketing strategy would thus represent a form of riba.

Question: The Prophet has prophesied the collapse of the international monetary system based on paper, plastic and electronic money. We are all enveloped in paper money today. What can we do about it?

Answer: The real solution will be possible only when the Islamic movement takes control of a territory. The Islamic government would then take steps which would eventually result in the elimination of paper money. The Islamic government would enact legislation which would make gold dinars and silver dirhams legal lender. The Islamic government would also establish mints which would mint the gold and silver coins for the public. When gold and silver dinars and dirhams have been given the status of legal tender, the result will be that labor will now negotiate wages in real money rather than artificial money.

Goods, property, real estate, and services will now witness sellers demanding real money in such sales.

The introduction of gold dinars and silver dirhams as legal tender will result in a continuous fall in the value of paper money. The more that value falls, and the faster it falls, will result in greater public perception of the superiority of real money over artificial money. Eventually paper money will collapse on its own. When it does, the greatest losses will be sustained, not by the poor masses, but by the predatory elite.

Until such time when real money is restored as legal tender Muslims should seek to protect their savings by keeping savings in gold and silver coins rather than paper money!

Source: IMRAN N. HOSEIN

to be continued . . . . 

The Prohibition of Riba (Interest) by Imran Hosein

The Prohibition of Riba (Interest) (Q&A) by Imran Hosein

Questions and answers on riba Part 1

THE PROHIBITION OF RIBA IN THE QUR’AN AND SUNNAH

Questions and Answers on Riba

Question: Is a Muslim allowed to place his money in a savings account or a fixed deposit in a bank?

Answer: No! That would yield an increase which would be interest or riba. And Allah the Most High and the Prophet (s) have prohibited Muslims from consuming riba.

Question: Is a Muslim prohibited from paying interest (riba)?

Answer: Yes! Whether it be interest on a loan for buying a house, or car, or for paying for college education, or interest payments on credit cards etc. Muslims have been prohibited from paying interest. The Prophet (s) cursed all four and said that they were all equally guilty, - the one who accepted riba; the one who paid riba, the one who recorded the transaction and the two witnesses. He said that they were all equally guilty.

Question: If a Muslim has already entered into riba for purchasing a house, what can he do in order to obey Allah the Most High, and His Prophet (s)?

Answer: He can sell the house and pay off the bank loan. He can then live in a rented property until he can afford to purchase a house with cash. If houses are expensive and he cannot afford to purchase one with cash he should follow the Sunnah and be content with the smallest house or apartment which can be built or purchased without having to borrow.

Or he can make an effort to attract a sufficient number of investors who would put up the money with which to pay off the bank. If the market value of the house was $100.000, and he owed the bank $50.000, then the investors who paid off the bank would have a 50% ownership of the house, and he would have 50%. He would then rent the house from the partnership (which now owns the house). If the rent is $1000 per month $500, would be returned to him as his share of the return on investment. He would then enter into a second agreement to purchase from the investors their equity in the property in accordance with a schedule of payments which is mutually agreeable. Every year, however there will be a new appraisal of the value of the property. Eventually when he has purchased the entire equity of his partners, he will be the sole owner of the house.

Question: Can a Muslim invest in the stock market?

Answer: First of all what is a stock? A stock is a part of a company; if you buy the stock of a company therefore, you have become a part owner of the company. You are now entitled to share in both profits and losses of the company. Investors earn dividend payments from their stocks. They can also realize a profit by selling their stocks for more than what they paid.

The stock market in a free market is a valid and legitimate economic Institution. But a free market no longer exists in the world today. The stock market in a capitalist economy is permeated with riba; indeed it is usually a den of gamblers and thieves. Speculation is the dominant force in today's stock market. And speculative transactions are riba. What is a speculative transaction? It is a transaction in which one buys anticipating that the price would eventually rise. When it does, one sells and makes a profit. It can also be a transaction in which one sells anticipating that the price will fall. When it falls one then buys back what one had sold and thus make a profit! Speculative transactions are no different from gambling. A Muslim should rather invest in his own business of failing that, invest in a halal business owned and operated by someone, or by a group of people who are honest and who have business acumen.

Today’s stock market operates on the basis of access to information. Whoever gets information first can exploit that knowledge and make money. Titus one of the keys to consistent gain in the stock market is access to timely information. Access to information is usually obtained through bribery and patronage. It thus becomes insider information. Insider information from official government sources is sometimes obtained as quid pro qua for political campaign contributions made at election time. Those honest investors who do not have access to insider information and privilegeded information stand no chance of success in a stock market which thus operates by way of deception, and hence by riba.

Question: Can a Muslim own and use a credit card?

Answer: A credit card is a card which permits its owner to borrow a certain amount within a period of time (usually one month). If that loan is repaid within the stipulated period then that loan would be an interest-free loan. If a on the other hand, the loan is not repaid within the stipulated time then interest (riba) would be charged on the loan. A Muslim is prohibited from paying interest, and so a Muslim who pays all his credit card debts on time, and never has to pay interest, may argue that he has not violated the law in using a credit card. Bui consider the following; The agreement with which one acquires a credit card is an agreement with provisions for riba. Such an agreement is haram for a Muslim. Thus by entering into the agreement one has entered into riba.

Can a Muslim accept credit on the condition that if at is not repaid on time the Muslim commits himself to drink a glass of whisky? No! Can a Muslim accept credit-on the condition that if it is not repaid on time the credit or will have the right to sleep with his wife? No! Well, then, how can a Muslim accept credit on the condition that if it is not repaid on time he will be obliged to pay riba?

Secondly, whatever leads to haram is itself haram. While one person may display financial responsibility to the extent of paying all credit card loans on time, there will be ninety-nine who will not, and who will enter directly into paying riba. To accept such a possibility one would have to adopt the principle in life of every man unto himself and the devil take the hindmost. A Muslim is prohibited from living such a life.

Source: IMRAN N. HOSEIN

to be continued . . . . 

The Prohibition of Riba (Interest) by Imran Hosein

The Prohibition of Riba (Interest) (Q&A) by Imran Hosein