Assalamu Alaikum brothers​ and sisters.
Please is borrowing money from banks or co-operatives with interest halal or Haram? and also is it permissible for a Muslim to join a cooperative society that pays dividends from profits​ made from issuing loans with interest?
Please support your argument with evidence either from the Quran or Hadith.
Jazakumullahu khairan

Haram


Answer
1. In Islam, interest is expressly prohibited in the Qur?aan and Ahaadith. The prohibition of interest in Islam is a well known rule even to non-Muslims. Ignorance of the basic laws of Islam is no excuse for a Muslim. Rasulullah [sallallaahu alayhi wasallam] said, ?To seek knowledge is compulsory upon every Muslim.?

To take an interest bearing loan is prohibited. However, if you have borrowed money from the bank, you have to repay the loan. We cannot understand how you cannot afford repaying the loan. Surely, you took the loan to repay it. You should make every possible effort to repay the loan. If you cannot pay the amount immediately, arrange a private loan and pay out the bank as soon as possible to avoid increase on the interest payment. If that is not possible, arrange a meeting with the bank and discuss with them. Remember, Islam teaches us honesty and truthfulness.

2. It is not permissible to indulge in any illegal act.

3. It is incorrect to state that the money of the Kuffaar is Halaal. Fraud, cheating and lying are all Haraam. It is not permissible for a Muslim to take an interest bearing loan. It is also Haraam to take a loan with the intention of not repaying the loan. That is lying and cheating.

4. It is permissible for the husband to derive pleasure from his wife?s body. However, it is not permissible for the husband and wife to engage in MouthAction, i.e. either spouse kissing or licking the spouses? private part.

and Allah Ta’ala Knows Best

Mufti Ebrahim Desai
FATWA DEPT.

Yes, only if, when you pay off your loan, you are giving back the exact amount that you borrowed.

Giving the lender back a total of $10,000 if you loaned $8,000 originally is called giving interest--and that is absolutely forbidden.

Giving the lender back a total of $6,000 if you loaned $8,000 originally is OK-if the lender says he gave $2000 as a charity or a gift to you.

There are Shariah Banks and wealthy individuals who are always willing to give people business and student loans without demanding interest. It is okay to take loans from these institutions. Always be 100% sure you will not have to give or take some form of interest. It can be sneaky: an extra $10 in this payment, this month, a couple of extra cents per day, etc.

It is also very risky for a Muslim's akhirah if a Muslim stays in debt. That is why we should not make large purchases on credit anyway. You want to buy a car or a house? Save up.

The only times taking a loan (even without interest) would not be discouraged is for helping someone in dire need, education, business investment, or medical issues.

The issues of interest is very controversial in Islam as some said is Haram while some said banking is business and every business there is profit.

Last Ramadan when Dr Ahmad Gumi said bank loan is not Haram there was serious backlash but his argument is that there was no express saying that bank interest is Haram in the quran or hadiths, infact when the prophet was living there was no money and banking, trade is done either by barter or gold and silver, he also argued that interest and usury are different.

According to Dr Gumi banking is business and in every business there must be profit regardless of what you call it, he said how do you expect you to collect 10,000 from me in 2014 when rice was just 8000 and pay back only 10000 in 2016 when rice is 20000 clearly the creditors lost money due to inflation. He said most of the scholars that said bank interest is Haram said is Haram cos it looks like usury but he said in Islam because something looks like something does not make it same, he further gave and example with water and whisky, he said both look alike but different when tasted, he also said should your ancestors come to life now if they see maltina they will all conclude is alcohol so looking like a thing does not make it same.

If you go to jaiz bank today that professes islamic banking what they charge is no different from what other banks charge as interest all they did was change it name .

Dis is business, It is Halai

phetto:
Dis is business, It is Halai

Surah Al-Baqara, Verse 275:
الَّذِينَ يَأْكُلُونَ الرِّبَا لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطَانُ مِنَ الْمَسِّ ذَٰلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا فَمَن جَاءَهُ مَوْعِظَةٌ مِّن رَّبِّهِ فَانتَهَىٰ فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللَّهِ وَمَنْ عَادَ فَأُولَٰئِكَ أَصْحَابُ النَّارِ هُمْ فِيهَا خَالِدُونَ

Those who eat Riba (usury) will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaitan (Satan) leading him to insanity. That is because they say: "Trading is only like Riba (usury)," whereas Allah has permitted trading and forbidden Riba (usury). So whosoever receives an admonition from his Lord and stops eating Riba (usury) shall not be punished for the past; his case is for Allah (to judge); but whoever returns [to Riba (usury)], such are the dwellers of the Fire - they will abide therein.
(English - Mohsin Khan)

What is the ruling on taking an interest-based loan from the bank for an urgent need such as continuing university studies, or buying a car for one who has a family, or buying a house for a family, knowing that the person who is taking the loan cannot find anyone to lend him money without interest?
Published Date: 2001-02-14
Praise be to Allaah.

Firstly: ribaa (interest, usury) is haraam wherever it exists and whatever form it takes. It is haraam for both the owner of the capital and whoever borrows it from him with interest, whether the borrower is rich or poor. Both are guilty of sin and indeed both of them are cursed. Whoever helps them in that, the one who writes down the contract and the one who witnesses it are also cursed, because of the general meaning of the aayahs and sound ahaadeeth which indicate that it is haraam.

Allaah says (interpretation of the meaning):

“Those who eat Ribaa will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytaan (Satan) leading him to insanity. That is because they say: ‘Trading is only like Ribaa,’ whereas Allaah has permitted trading and forbidden Ribaa. So whosoever receives an admonition from his Lord and stops eating Ribaa, shall not be punished for the past; his case is for Allaah (to judge); but whoever returns (to Ribaa), such are the dwellers of the Fire — they will abide therein.

Allaah will destroy Ribaa and will give increase for Sadaqaat (deeds of charity, alms). And Allaah likes not the disbelievers, sinners” [al-Baqarah 2: 275-276]

‘Ubaadah ibn al-Saamit (may Allaah be pleased with him) narrated that the Prophet (peace and blessings of Allaah be upon him) said: “Gold is to be paid for by gold, silver by silver, barley by barley, dates by dates, like by like, payment being made hand to hand. He who made an addition to it, or asked for an addition, in fact dealt in usury [ribaa].” (Narrated by Muslim in his Saheeh).

It was narrated that Jaabir (may Allaah be pleased with him) said: “The Messenger of Allaah (peace and blessings of Allaah be upon him) cursed the one who consumes ribaa, the one who pays it, the one who writes it down and the two who witness it. He said they are all the same.” (Narrated by Muslim).

... Whoever is unable to work and is poor is allowed to ask for help, and to take zakaah and social security.

Secondly: The Muslim, whether he is rich or poor, is not allowed to take a loan from the bank at 5% or 15 % or more or less, because that is ribaa and is a major sin. Allaah has caused him to have no need of that because of the ways that He has prescribed such as means of earning a halaal income by working as an employee for company owners, or as a civil servant in permissible work, or by dealing with the money of another on a profit-sharing basis.
Islamqa

HAH:
The issues of interest is very controversial in Islam as some said is Haram while some said banking is business and every business there is profit.

Last Ramadan when Dr Ahmad Gumi said bank loan is not Haram there was serious backlash but his argument is that there was no express saying that bank interest is Haram in the quran or hadiths, infact when the prophet was living there was no money and banking, trade is done either by barter or gold and silver, he also argued that interest and usury are different.

According to Dr Gumi banking is business and in every business there must be profit regardless of what you call it, he said how do you expect you to collect 10,000 from me in 2014 when rice was just 8000 and pay back only 10000 in 2016 when rice is 20000 clearly the creditors lost money due to inflation. He said most of the scholars that said bank interest is Haram said is Haram cos it looks like usury but he said in Islam because something looks like something does not make it same, he further gave and example with water and whisky, he said both look alike but different when tasted, he also said should your ancestors come to life now if they see maltina they will all conclude is alcohol so looking like a thing does not make it same.

If you go to jaiz bank today that professes islamic banking what they charge is no different from what other banks charge as interest all they did was change it name .

Pls don't rely on Dr. Gumi's fatwas alone, some of his arguments are highly controversial.

He wants to take out a loan with interest to set up a business that will benefit poor Muslims

Im involved in the initiation and coordination of an international based trade amongst different parties, whereby the funding is to be financed by a bank charging interest. The apparent material benefit is collossal to the poor Muslims if it succeeds. Is it halal for me to do so.

Published Date: 2017-03-07

Praise be to Allah

Dealing with interest is a major sin, concerning which there is a stern warning and threat to the one who does that.

Allah, may He be exalted, says (interpretation of the meaning):

“O you who believe! Fear Allah and give up what remains (due to you) from Ribaa (from now onward) if you are (really) believers.

And if you do not do it, then take a notice of war from Allah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums)”

[al-Baqarah 2:278-279].

And Allah, may He be exalted, says (interpretation of the meaning):

”Those who consume Riba will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytaan (Satan) leading him to insanity. That is because they say: ‘Trading is only like Riba,’ whereas Allah has permitted trading and forbidden Riba. So whosoever receives an admonition from his Lord and stops consuming Riba, shall not be punished for the past; his case is for Allah (to judge); but whoever returns (to Riba), such are the dwellers of the Fire — they will abide therein.

Allah will destroy Riba and will give increase for Sadaqaat (deeds of charity, alms). And Allah likes not the disbelievers, sinners.”

[al-Baqarah 2:275-276].

Muslim (1598) narrated that Jaabir (may Allah be pleased with him) said: The Messenger of Allah (blessings and peace of Allah be upon him) cursed the one who consumes riba and the one who pays it, the one who writes it down and the two who witness it, and he said: they are all the same.

So it is not permissible for the Muslim to take out a loan with interest and oppose Allah, may He be glorified and exalted, even if that loan is for the purpose of doing a righteous deed, such as building a mosque or a school for memorisation of Qur’an, or to help the poor and needy, and the like. For Allah is Good and does not accept anything but that which is good.

Riba is one of the gravest of prohibited things, so it is not permissible for a Muslim to take the matter lightly or to do it, whether that is for the purpose of helping poor Muslims or any other cause.

Ibn al-Qayyim said: The prohibition on Riba an-Nasee’ah [which means that the amount of debt is increased when the debtor is unable to pay off the debt at the appointed time and requests extra time in which to pay it off] comes under the heading of prohibition of ends that are in and of themselves haraam; the prohibition on riba al-fadl [which refers to when similar commodities are exchanged unequally, such as one measure of dates for two measures of a different quality of dates] comes under the heading of prohibition of means. Hence no kind of riba an-nasee’ah is permitted. See: I‘laam al-Muwaqqi‘een (2/107).

Riba an-nasee’ah is the basis on which banks operate (lending with interest).

Seeking to do good and righteous deeds, and to bring relief to the poor and needy, cannot be achieved by indulging in sin and evil. A small amount of blessed and halaal trade is better than a great deal of riba that is subject to destruction. Allah, may He be exalted, says (interpretation of the meaning):

“Allah will destroy Riba”

[al-Baqarah 2:276].

It was narrated in Musnad al-Imam Ahmad (3672) from Ibn Mas‘ood (may Allah be pleased with him) from the Prophet (blessings and peace of Allah be upon him): “And no person who acquires wealth from haraam sources and spends from it will be blessed in it, and if he gives it in charity it will not be accepted from him, and if he leaves it behind, it will be his provision on his journey to Hell. Allah, may He be glorified and exalted, does not erase a bad deed by means of another bad deed; rather He erases bad deeds by means of good deeds. Evil does not erase evil.”

Classed as saheeh by ar-Daaraqutni in a mawqoof report. See Haashiyat Tahqeeq al-Musnad, ar-Risaalah edn. (6/189).

The scholars of the Standing Committee for Issuing Fatwas were asked: there is a man who has some money, and he wants to put it in a bank. He knows that the bank will give him some interest, but he is aware that this extra money is riba and is haraam. If he leaves it, the bank will take it and make use of this riba. Is it permissible for him to take the riba and give it to some poor families without seeking any reward, only so that the families will benefit from this money, because they are in urgent need of money, and that would be instead of the bank making use of it?

Answer:

It is not permissible to put money in riba-based banks with the aim of taking the interest, no matter for what purpose, because Allah has prohibited riba and has issued a stern warning against it, and the Prophet (blessings and peace of Allah be upon him) cursed the one who consumes it, the one who pays it, the two who witness it and the one who writes it down. So it is not permissible to take it with the intention of giving it in charity, because it is evil and haraam earnings, and Allah is Good and does not accept anything but that which is good.

End quote from Fataawa al-Lajnah ad-Daa’imah, 13/355.

And Allah knows best.

https://islamqa.info/en/249071

HAH:
The issues of interest is very controversial in Islam as some said is Haram while some said banking is business and every business there is profit.

Last Ramadan when Dr Ahmad Gumi said bank loan is not Haram there was serious backlash but his argument is that there was no express saying that bank interest is Haram in the quran or hadiths, infact when the prophet was living there was no money and banking, trade is done either by barter or gold and silver, he also argued that interest and usury are different.

According to Dr Gumi banking is business and in every business there must be profit regardless of what you call it, he said how do you expect you to collect 10,000 from me in 2014 when rice was just 8000 and pay back only 10000 in 2016 when rice is 20000 clearly the creditors lost money due to inflation. He said most of the scholars that said bank interest is Haram said is Haram cos it looks like usury but he said in Islam because something looks like something does not make it same, he further gave and example with water and whisky, he said both look alike but different when tasted, he also said should your ancestors come to life now if they see maltina they will all conclude is alcohol so looking like a thing does not make it same.

If you go to jaiz bank today that professes islamic banking what they charge is no different from what other banks charge as interest all they did was change it name .

The issue of Interest is never a controversial issue in Islam. It is well spelt out in the Qur'an. See the quotations from the Quran posted above.

Trustworthiness:


The issue of Interest is never a controversial issue in Islam. It is well spelt out in the Qur'an. See the quotations from the Quran posted above.

ok, but please what is the position of inflation vis a vis time value of money in islamic finance

Islamic banking and finance have developed so much that it is no longer useful to look at the issue of interest with simplistic eyes. In countries where Islamic banking is practiced, they see banking purely as business where two parties agree to trade and share profit, such as Muraabaha( profit sharing). So if I want to buy a car, for example, I can approach a bank. The bank can purchase the car, for say $10,000. It will now sell the car to me for $12,000, the $2000 being it's own profit while it allows me to pay back the $12,000 in installments. This is just an example of how not to take the issue too simplistically.

Zamzamiu:
Islamic banking and finance have developed so much that it is no longer useful to look at the issue of interest with simplistic eyes. In countries where Islamic banking is practiced, they see banking purely as business where two parties agree to trade and share profit, such as Muraabaha( profit sharing). So if I want to buy a car, for example, I can approach a bank. The bank can purchase the car, for say $10,000. It will now sell the car to me for $12,000, the $2000 being it's own profit while it allows me to pay back the $12,000 in installments. This is just an example of how not to take the issue too simplistically.

What if I approach the bank for business loan and the business make loss?

Assallamu alaikum. We should please stop confusing ourselves and others, the fatwa on ribaa is simple.
1. You can borrow money in form of partnership with agreeable interest/sharing formula
2. The two party will bear the lost In case it occurs so as they share the profit
3. The amount borrowed must be used strictly to finance business, no paying of school fees, settling of medical bills or anything in that form
Thank you