Financial Transaction

RIBA OR INTEREST

If you lend a person Rs. 100/- and you demand Rs. 110/- in return, to cite an example, this surplus is called Riba or interest and this transaction is a transaction of Riba and interest. Undertaking a transaction that involves Riba or interest is a Haraam transaction. It is so grave that Allah Ta’ala has called it declaring war against Allah and His Rasul (Sallallaahu Alaihi Wasallam). The consequence of undertaking a transaction that involves interest is much more/graver than the consequence of declaring war against a superpower.

FIXED DEPOSIT

It is absolutely Haraam to open a fixed deposit account at the bank and use the interest that is accrued from it. Many people think that it is an easy means of livelihood. Nevertheless, it is very grave as interest is very impure and it is like declaring war against Allah Ta’ala and His Rasul (Sallallaahu Alaihi Wasallam). It is not something trivial!

[English version of "Fixe deposit" – Al Jamiat – Vol.2 No.2]

Life insurance

Question:

Does a person have the right to insure his life? 

Answer:

Loan or investment

We often hear that a person has become indebted. He had borrowed money from people to do business. And finally, he went bankrupt and people are asking him back their money. In this case, one has to see if these people had borrowed him money or they had invested with a defined profit margin. If they had borrowed, they are entitled to the money borrowed. If the person has suffered a loss, it has nothing to do with them nor are they entitled to the profit that the person got otherwise this surplus will be Riba (interest).

Riba

One borrows a person Rs.10,000 for a certain period. But one asks him to return Rs.11,000 The extra Rs.1,000 that one is asking for is Riba. This is what is termed interest. Loans that people take from the bank are purely Riba.

The gravity of Riba (interest)

Hazrat Abdullah Bin Mas'ud (Radiyallahu Anhu) reports that Nabi (Sallallaahu Alaihi Wasallam) said, "Riba (interest) is of 73 degrees, the least degree is that of a person having intimate relationship with his mother." (Al-Mustadrak)

Note:

Borrowing money

As far as possible, we should not borrow. If it is necessary, then we must say everything truthfully when borrowing. One must not tell the person that one will return the money back in one or two weeks when one knows very well that one will not be able to do so. This is called cheating people to extract money from them, as the person is lending with the impression that one is going to return it very quickly. Perhaps he also has commitments to other people.

Syndicate content