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Session Details
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| Guest Name |
Dr. Monzer Kahf
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| Profession |
Scholar in Islamic Economics & Financial Expert
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| Subject |
Financial and Economic Issues
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| Date |
Sunday,Dec 7 ,2003
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Time |
Makkah
From...
18:30...To...
20:00
GMT
From... 15:30...To...17:00
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Host
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| Question |
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| Answer |
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
Brothers and sisters, the session has already started. You can submit your questions. Please, make your questions short and clear so as to help us answer all your questions.
Yours,
Islam Online Fatwa Editing Desk.
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| Name |
Muhammad
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| Profession |
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| Question |
Kindly guide me whether purchasing the goods on installments is right or wrong? Normally, we have to pay more than the original price while taking the goods on installment and the seller terms it as "rent". Your reply shall definitely help me. Thanks is advance.
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| Answer |
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
There are two distinct contracts, one is installment sale and the other is rent with option to buy. It seems the seller is confusing you about these two contracts.
Installment sale is permissible in the Shari’ah even if the price (the total amount of all installment) is higher than what the seller usually announces as the cash price whether the difference is expressed percentage wise (cash price + certain percentage) or a given amount added above the cash price.
It is, however, not permitted in the Shari’ah to make the contract optional with two prices: cash and installment, i.e. I sell you this commodity for either a 1000 cash or 1200 on e.g. installment.
The second contract is also permissible as long as the sale at the end of rental period is optional or at least the sale contract is concluded at the end of the rental period. The example of this contract is as follows: you rent a TV for 25 a month and you have the option to buy it after 6 months for an amount that is less than today’s cash price by $ 100 (the amount of rent paid) or more or less.
You can also read:
Sale by Installments
Allah Almighty knows best.
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| Name |
Hatem
- United States
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| Profession |
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| Question |
How can you consider credit card halal while the contract is 100% Riba? Even if you are not going to pay the interest, you have signed that you might pay it. Thus, the contract is Riba-based. What is the evidence that makes this halal?
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In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
Dear brother Hatem,
The contract is not Riba-based as you think. It is in fact optional. It gives you the option to either go a ribawi way or a non-ribawi way. Is it wrong to have a contract to drink either water or alcohol? Or to eat either fish or ham?
Accepting such a contract on the part of the person who is given the option is permissible provided she/he is sure that a choice that he or she will choose the halal option only; obviously provided he or she has the ability to implement this choice.
It is certainly not permitted for a Muslim or a Muslim institution (e.g. Islamic banks) to issue a contract that contains this option, but remember we are only talking about credit cards issued by non-Muslim institution, for them Riba is a normal practice.
Allah Almighty knows best.
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| Name |
Idrees Ahmad
- Albania
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| Profession |
Student
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| Question |
What is the punishment of not giving Zakah? Is there any other way that you can substitute Zakah. I mean if you give a lot of Sadaqah or feed poor people? Does it compensate you for not giving Zakah?
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| Answer |
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
1. There are two kinds of punishment for not giving Zakah. If you live under an Islamic Law, the Prophet (peace and blessings be upon him) said that for a person who does not pay Zakah, we shall take it from him (by the force of law) along with one half of his property (as a fine).
The second punishment is in the Hereafter. The Prophet (peace and blessings be upon him) said that he who does not pay Zakah will have his zakatable property (sheep, cows, camels, gold and silver etc.) stampeding him or closing in on his neck (for gold and silver) in the fire of Hell. Obviously, if the Islamic Law is not implemented, Allah will make judgment on such a violation of a basic Islamic pillar.
2. Zakah must be paid to its recipient with the intention of being a Zakah payment, because Zakah is a worship like prayers. If someone makes all the movement and reading of the prayer without the intention, would that be considered a prayer fulfilling the required obligation?
Certainly not; the same applies to Zakah. If Zakah for a given year is not paid, it remains a debt on the property payer and she/he remains under the obligation of paying that overdue amount, it can even be out of his/her estate after death, because it is the right of the poor and needy.
Paying sadaqah or charity does not compensate for the lack of payment of Zakah. However, when you pay a sadaqah to a person who deserves Zakah, you may make the intention that this payment is in fulfillment of your obligatory Zakah for the current year or for past year.
At the end of the current year, you may add all these payments intended as Zakah and deduct their total from the amount due on you as Zakah.
Allah Almighty knows best.
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muslim
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| Question |
Is there any Hadith, "La Riba Bayna Al-Harbi Wal Muslim" (there is no interest between Muslims and non-Muslim)?
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| Answer |
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
No, there is no correct Hadith about permissibility of Riba between Muslims and non-Muslims in non-Muslim countries.
Allah Almighty knows best.
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| Name |
Hammad
- Canada
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| Profession |
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| Question |
How should Muslims living in Canada/US buy a house since buying a house means paying interest?
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| Answer |
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
Muslims in the US and Canada are required to establish financial institutions that provide them with financing for housing and other needs in ways that are compatible with the Shari’ah.
This is a collective obligation on all Muslims. It is especially addressed to those who are capable among them. Unless this collective is discharged of, all capable Muslims are considered sinful according to our religion.
Until that obligation is fulfilled, individual Muslim families who need housing may resort to interest-based financing provided that they are not able to obtain financing from conventional financial companies/banks on the basis of contracts that are compatible with the Shari’ah.
You can also read:
"Necessity" that Allows Buying a House on Mortgage
Allah Almighty knows best.
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| Name |
muslim
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| Question |
Have you seen the non-interest loan to buy house in Canada by a housing society? It seems that they are exploiting the needy and charging more than the conventional banks. Are there terms and conditions are Islamic?
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In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
No, I have not seen this contract, and I do not know this “housing society” in Canada.
I am familiar with the Islamic Housing Cooperative of Canada and I know that their contract is compatible with the Shari’ah. Compared with conventional banks, their charges are higher. However, this overcharge does not go to any private bodies because the Islamic Housing Cooperative is a non-Profit organization. It seems that we need several Islamic Housing Cooperatives and Profit-making private Islamic financing companies in order to have more competition among them so that their charges come down to normal.
Allah Almighty knows best.
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muslim
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| Question |
If a person has a valid reason to buy a house on interest-based loan but he choose not to take a loan and suffer hardship. Will he/she be awarded for this from Allah?
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In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
To the best of my knowledge, the Shari’ah and the whole religion of Islam has been sent down by Allah to remove suffering and hardship, not to make Muslims suffer and live under hardships.
I am not aware of a reward for undertaking unnecessary hardship in this religion. No doubt, Allah knows best our intentions and He may reward whoever He chooses.
Allah Almighty knows best.
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| Name |
muslim
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| Question |
Fataws given by the North American `Ulama about interest-based loan for valid reason is rejected by other `Ulama ( Like Mufti Dessai from S.A.) To whom should we follow and why?
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| Answer |
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
You are responsible to make your own ijtihad with regard to whose opinion you trust and choose.
You can also read:
Dealing with Conflicting Fatwas!
Allah Almighty knows best.
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| Name |
muslim
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| Question |
What is the difference on interest ruling in Darul-Kufar, Darul-Harb and Darul-Islam?
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In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
The basic difference is that Islamic Law is presumed to be in application in Muslim countries whereas it is not presumed to be in application in non-Muslim countries.
Allah Almighty knows best.
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| Name |
sumaiya
- Canada
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| Question |
I heard that credit cards are a form of Riba. Is there any harm in using them?
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| Answer |
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
Using credit card is not permissible in the Shari’ah if you know you are not going to pay all a balance within a grace period, because any delay in payment provokes the interest clause in the credit card contract.
You can also read:
Credit Cards
Allah Almighty knows best.
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| Name |
Khalid
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I read your fatwa on life insurance, and also that of great Sheikh Zarqa, may Allah bless your soul. However, the point that is not clarified is that even if you have a contract that does not entail Riba, the idea of insurance itself is Riba: you give money and receive a specified amount of money. I read the fatwa of Majma' Al Fiqh Al-Islami on this and it says at the end : "the only person who holds a different opinion on insurance, is Sheikh Zaraqa and it is left for him to reconsider it.
Is it a good idea to follow the opinion of one or two or 5 scholars while the most scholars in the Muslim world hold a different opinion, with my due respect to all of them.
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In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
You are correct that those who accept the fatwa of the late sheikh Zarqa are a minority among classical Muslim fuqaha’, but the fatwa is gaining round in the circles of fuqaha’ who understand the complexity of modern life. It is so to the extent that certain kinds of insurance, especially car insurance, is becoming a necessity in all Muslim countries and many of them made it compulsory.
The argument that insurance is itself Riba is incorrect because premium are paid for security (comfort of mind) like the classical contract of road safety (it is a known contract in the Shari’ah) that you take this road and I guarantee your personal and property safety).
On the other hand, the amount paid by the ensurer is a compensation for damage, loss, or as a result of a future incidents. The exchange is not between a premium now and a large sum later, except for one form life insurance that guarantees you a given amount after a given number of years. This contract is not permissible according to Sheikh Zarka.
The final acceptance or non-acceptance of this opinion remains within your heart. As far as I am concerned, I accept it and preach it. I know that insurance is one of the basic relationships in contemporary life, not because of the capitalist or secularist system, but because of basic material and social modes of contemporary life especially in metropolitan areas.
Allah Almighty knows best.
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| Name |
kamal
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| Question |
I understand that you said that option trading on stocks are haram. If this is correct, why? Can I get more information on this matter? I can read Arabic well if you have anything in Arabic about this. Please advise.
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In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
The basic argument against options in the Shari’ah is that of their artificiality. Here is a contract that is fabricated only for the purpose of creating a market for it. There is nothing real about it. It is a derivative.
Kindly refer to the review of Islamic Fiqh Academy of the OIC, number 7, year 1412 (1992). There you will find the discussion on this issue and the resolution of the OIC fiqh academy. You can order this majjala from the OIC Fiqh Academy office in Jeddah, tel: Jeddah 6671664.
Allah Almighty knows best.
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| Name |
Sayful
- United Kingdom
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| Profession |
Graduate
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| Question |
A while ago, before I knew much about Islam and my duties, I arranged a loan for a car I needed. I did not realize that loans were haram, I am still paying off the monthly payments now for the loan and still have the car. Is it wrong that I still have the car now that I realize. Should I try to sell it (if so, what should I do with the money?) Will my prayers be answered considering what I have done in the meantime?
Thank you so much for a magnificent service you offer, may Allah be pleased with you all.
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In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
If you need the car, you do not have to sell it, but you still have to honor your interest-based contract that you wrongly entered into. At the same time, you should try to get rid of this prohibited contract as soon as you can by making extra payment out of principle or by substituting your car with a smaller or cheaper one.
Allah Almighty knows best.
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Editor
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| Answer |
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
Brothers and sisters, we are so sorry for not answering all your questions because the time is over. We apologize for any inconvenience. Do keep in touch. Join us in coming sessions.
Yours,
Islam Online Fatwa Editing Desk.
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| All Fatwas published on this website (Islamonline.net) represent the juristic views and opinions of eminent scholars and Muftis. They do not necessarily form a juristic approach upheld by this website. Click here to read Full Disclaimer. |
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