Fixed-profit Partnerships
In Islamic jurisprudence, the partnership of a capital owner and a laborer is called “mudarabah.” Mudarabah is a form of business in which one party brings capital and other personal…
Continue ReadingEconomics
Controversies Over the Definition of Riba – Interest/Usury
In this day and age, controversies over the definition of “riba = الربا” continue among Islamic scholars. Riba is usually translated as “interest” or “usury” into English. A party of…
Continue ReadingALMS vs. INTEREST / SADAQAH vs. RIBA
Alms versus Interest Sadaqah (صدقة) versus Rib’a (ربا) Financial aids provided without expecting anything in return are counted as alms (sadaqah) in Islam. On the other hand, interest is the…
Continue ReadingRepentance from Obtaining Unlawful (Haraam) Wealth
First of all, we need to tell that violating one of God’s commands deliberately can take you to the limits of kufr, which means ignoring God’s verses, if you do…
Continue ReadingInterest in My Health Savings Account
Any amount of money received in addition to your capital is interest, and it is haraam. The only exception is the rate of inflation: Before the fiduciary monetary system (paper…
Continue ReadingIs it lawful -halal- to use the bonus points paid by banks?
They are the presents of the banks that offer the credit card and presents are halal. You can use them.
Continue ReadingIs Late Fee Considered as Interest?
Before the fiduciary monetary system (paper money system), money was made of gold or silver, which are precious metals. Therefore, any amount of increase added on the principal was obviously…
Continue ReadingUsing Counterfeit Goods and Pirated Content
The act of using counterfeit products is similar to acquiring things which you are indeed not entitled to, and this is only another description of “stealing”. Therefore, using counterfeit products…
Continue ReadingIs getting government scholarship lawful or not?
Interest is the extra money that is gained by loaning certain amount of money for a certain time period. That extra money received is considered as interest for the authorities…
Continue ReadingPaying off debts by loaning
Do not resort once again to the forbidden (haraam) in order to pay your debts. A mistake cannot be corrected by another mistake. Otherwise, your debt can turn into a…
Continue ReadingPartnership on a fixed profit
Such a partnership would not be permissible. Gained money would be “interest”. If one likes to make a partnership, he needs to buy agreed amount of shares in return…
Continue ReadingEarly Payment Discount and Interest
Majority of scholars, compared discounts granted for early payment of the debt to the additions to the debt for late payment, and thus regarded this practice same as interest. On…
Continue ReadingDeath of a creditor
When people die, the possessions and receivables transfer to their inheritors. Someone who is in debt to the deceased then becomes indebted to his inheritors. Therefore, the debt must be…
Continue ReadingBuying Foreign Exchange by Credit Card
Trading different types of currencies is called exchange, or foreign exchange (abbreviated: forex). While exchanging, the amounts do not necessarily have to be equal but the equivalents must be paid…
Continue ReadingTrading unlawful things
Trading things that are unlawful is also unlawful. Allah the Almighty commands: “Whoever intercedes in a good cause shall have a share from it; and whoever intercedes in an evil cause…
Continue ReadingLending and Receiving in Different Currencies
The differential in borrowing and lending can be calculated according to the changes in value of gold or silver or the rate of inflation. Nowadays gold and silver are not…
Continue ReadingMissed Credit Card Payments
You would not be responsible for missing a credit card payment in case of financial impossibility. However, you must be utterly careful not to cause these interest-based transactions, by accounting…
Continue ReadingRuling on Leasing
Leasing, which actually means financial renting, is buying an item and renting it to people or companies who are in need of it. This gives an opportunity to invest without…
Continue ReadingBuying and selling of public property
These properties are natural resources. Normally, they belong to public authority. If the public authority privatizes, then there is no harm in buying/selling these properties. But if there is no…
Continue ReadingBonds
A bond is a debt security which includes interest. Giving/taking loans on interest is forbidden in Islam. You ask for the ruling of buying/selling these kinds of loans as a financial instrument….
Continue ReadingWorking in a company that borrows loan on interest
One of the main principles in business is to stay out of interest based income. But it seems that your company does not mainly deal with interest. In these situations,…
Continue ReadingCan we demand the loss caused by delayed payments from the debtors?
If the debtors do not pay in time and the value of debt amount changed due to inflation, you can demand the difference caused by inflation from the debtor. The…
Continue ReadingWere the older communities ordered to give tax (zakat) like we are?
Allah the Almighty says: “He has prescribed for you the religion which He enjoined upon Noah, and which We revealed to you, and which We enjoined upon Abraham and Moses…
Continue ReadingCan I buy a house by using mortgage from a bank?
Mortgage is “a conveyance of an interest in property as security for the repayment of money borrowed” (wordreference.com). As you can see in the definition, interest is conveyed through mortgage. Dealing…
Continue ReadingStock market
There are different things you can buy/sell in stock market. One of them is called stock certificate. This one is theoretically permitted to buy/sell, for that it means the ownership…
Continue ReadingIs it permitted to rent our real estate property to banks?
It is not permitted to rent property to people or corporations that work directly on a forbidden issue. Allah the Almighty says: “Who intercedes in a good cause shall have…
Continue ReadingWhat is the ruling on giving a tender to a predetermined company?
It is only permitted if the tendering authority is the owner of the business. The company can assign its business to any sub-contractor company it wills. But it is not…
Continue ReadingHow to borrow gold from jewelers?
If someone asks for 10 grams of gold or its actual market value as a loan, and returns it back with either gold or its actual market value, then there…
Continue ReadingIs it permitted to rent gold?
Goldsmiths neither use the gold as an ornament, nor as a tool to make production. They process on it to produce different shapes of gold and sell them. Giving gold…
Continue ReadingWhat is the difference between renting and interest?
Renting and interest differ from each other by these aspects: A) Interest 1. Interest comes out from giving (lending) money or money-like goods for a certain period of time and…
Continue ReadingIs it lawful to buy cash by credit card?
This is considered usury under the image of trading. In this process, the person who is in need of cash will buy from the shopkeeper, for example 97 liras in…
Continue ReadingIs it lawful to buy and sell gold over internet?
It can only be lawful if it is cash bargain and the gold is physically transferred to the buyer at the same time either by hand or via bank account…
Continue ReadingWill it be a sin if we give rushwat for taking our own property which is wrongfully seized?
Question: A construction company applied to the municipality for saving our land which is announced as green land unjustly. It turned out positive. But the municipality asked illegal money for…
Continue ReadingIs e-commerce legitimate?
The narration that forbids selling goods which are not possessed is like this: From Hakim Ibn. Hizam: I came to the Messenger of Allah and said, “Someone comes to me…
Continue ReadingCan we give out the interest profit to the poor?
Interest profit is not like pork or wine. It is not possible to distinguish the money earned in a halal way from the unlawful (haraam) profit. Interest profit is haraam…
Continue ReadingIs it lawful to buy gold in installments by using credit card?
It is not lawful to buy or sell gold in installments. Our Prophet stipulated that purchase and sale of gold should be in cash and the transfer should be on…
Continue ReadingBorrowing interest-based loans
A bank loan means a debt with interest. Interest is one of the biggest sins. It is not a right thing to borrow an interest-based loan immediately when a financial…
Continue ReadingIs it permitted to get the 0% interest credits?
Credit means, loan with interest. No bank would loan without interest. Although it may be called ‘processing costs’ or ‘commission’, banks try to benefit from the money they loan. Giving…
Continue ReadingIs the interest from National Savings Certificates Haraam?
National Savings Certificates and Treasury Bonds are debentures with interest. The income earned from them is RIBA. If Finance Institutions run in accordance with their systems, which means they do…
Continue ReadingWhat is the sentence for directing our customers to bank credits(loans)?
Question: I am working at a car company. When our customers are going to buy a car, they are using credits from the banks or the finance houses. In one way…
Continue ReadingShould we collect jizyah from our non-muslim neighbours?
Jizyah is a tax by the government. If the government is Islamic-based, tax is collected from non-muslim citizens. Individuals do not have the right to collect tax/jizyah from any of…
Continue ReadingWhat is the ruling on life insurance?
Life insurance does not base on the principles of risk, damage or cooperative sharing. Basic principle of life insurance is, to deposit money in a bank and retrieve it together…
Continue ReadingRelation Between Alms and Market Economy
Interest is the income provided by ‘capital’, which is a factor of production. In other words, it is a sum paid or charged for the use of money or for…
Continue ReadingAmount Of Interest
According to Qur’an, every type of loan that is given to provide income is called usury; and the provided income, that is interest, is also usury whatever the ratio or…
Continue ReadingBEY BI’-L-ISTIĞLÂL
Moneylenders were not satisfied with the “two safkas in one safka” concept so including another “safka” they established the “bey bi’listiğlâl” (البيع بالإستغلال). The term “istiglal” refers to the…
Continue ReadingIslamic Economics
With the name of Allah the Beneficent the Merciful, Whatever Allah- the holder of all creatures- does, is beautifully done. His beneficence is infinite and his mercy abundant. He…
Continue ReadingUSURY HIDDEN BEHIND IMAGE OF SALES
Nobody can produce everything to meet all his needs. We do meet the vast majority of our needs such as nutrition, housing, and so on with the goods and services…
Continue ReadingTHE ATTITUDE OF MONEYLENDERS
The Glorified Allah commands: “Those who eat usury cannot behave different from those who have been deceived[1] by Shaitan. This is the reason they say, “Trading is just like usury”….
Continue ReadingTHE WAR AGAINST ALLAH AND HIS MESSENGER
The Glorified Allah commands: “O believers! Fear Allah! If you are of the believers relinquish what remains (due) from usury. If you do not do it, then you are in…
Continue ReadingTHE RELATIONSHIP BETWEEN USURY (Faiz) AND CHARITY (Zaqaat))
The Glorified Allah commands: “Whatever you lay out as usury, so that it may increase in the property of men, it will not increase for Allah. Whatever you give as…
Continue ReadingPROHIBITION OF USURY
First, the usury was prohibited with the following verse: “O believers! Do not devour usury that doubles and redoubles. Be careful of (your duty to) Allah, that you may be…
Continue ReadingUSURY IN QURAN AND SUNNAH
The term used to define usury in the Quran is riba. Riba(الربوا) or (الربا) in their infinitive form stand for ‘add’ and ‘increase’ while in their noun form they do…
Continue ReadingTrade and Usuary
The saving of money is called accumulation. The system of accumulations by paying interests and its lending with interest to a third side is called the credit system. Contemporary…
Continue Reading