Letters to the Editor

Kindly consider the following Hadith from Muwatta to answer my questions:
Malik related to me that Zayd ibn Aslam said, “Usury in the Jahiliyyah (days of ignorance prior to Islam) was that a man would give a loan to another for a set term. When the term was due, he would say, ‘Will you pay it off or (accept to) increase (the amount) for me?’ If the man paid, he took it. If not, he increased him in his debt and lengthened the term for him.”

Malik said, “(Another) disapproved way of doing things, about which there is no dispute among us, is that a man should loan out to another for a term, and the lender reduces the amount if the borrower would pay back in advance. To us it is similar to someone delaying repaying of his debt after it is due and his creditor demanding increase in the amount (because of delay). This is nothing but usury. No doubt about it.”

Malik also spoke about a man who loaned one hundred Dinars to a man for two terms (seasons). When it was due, the borrower said to him, “Sell me some goods, whose price is one hundred Dinars in cash for one hundred and fifty on credit.” Malik said, “This transaction is not good, and the people of knowledge forbid it.” He added, “This is disapproved because the creditor himself gives the debtor the price of what the man sells him, and he defers repayment of the hundred of the first transaction for the term which is mentioned to him in the second transaction, and the debtor increases him with fifty Dinars for deferring. That is disapproved of and it is not good. It resembles the hadith of Zayd ibn Aslam (mentioned above).”

Now, the questions are:

Question 1. In the light of this report can it be concluded that the present credit card system also falls into this form of RIBA, and consequently can it be considered haram?

YMD

We are not too sure about all the functions of a credit card. One of the dealings that we know of is that a person may have no money in his account in the bank, but buys goods paying through the credit card. In turn the bank charges interest until equivalent amount arrives in the person’s account. In short, the bank lends the money on interest. This is disallowed in Islam.

Q. 2. What is the ruling on fixed deposits and the use of the interest money so received?

YMD

The ruling on interest money received from the banks is that either the bank may be informed not to add any interest amount in the account, or, if added, left there, or, drawn and given in charity without the hope of reward but fear of accounting.

Q. 3 Also, can a building be given out on rent to a bank?

M.F

YMD

Renting out a building to a bank is not desirable. However, Deoband may be contacted to find out whether the opinion remains the same in a country like India, where economic rights of the Muslims are still being denied in a variety of indirect ways. For example, despite all the talk of their upliftment, they remain only 1-2% in government employment instead of 20 and above.

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