Home > Fiqh, Money > Q/A Regarding Transactions/Insurance/Working in Banks etc – PART 2

Q/A Regarding Transactions/Insurance/Working in Banks etc – PART 2

Notes from Islamic Online University Fiqh Muamalat Lecture by Dr. Anwar Madhani.

Q1.If a bank announces that it is an Islamic bank and deals in Islamic way,is it enough for us to trust or should we verify it further?
Answer:-We should definitely verify ,because there are too many people around claiming too many things .We also know that it is not easy to verify for a layman,it may almost be impossible.We may have to go through the Ulema/Mashiakh/scholars to guide us and provide us with the necessary information.

Q2.To keep money in a commercial bank,is it allowed or not,with /without interest?
Answer:-When we keep money in the bank,we are promoting their system.Allah says that
“And support each other in acts of righteousness and piety,and do not support each other in activities which lead towards haram and acts of sinfulness.”
On this basis ,keeping money in commercial banks is discouraged.Involving in the system of Riba is definitely not acceptable ,and if you do gain something then it is to be donated and tauba to be done.While at the same time ,it is allowed to keep the money in the bank (due to the fear of it being stolen ,if kept at home)but try to keep it in some Islamic bank if it is around your locality.Allah knows best.

Q3. What about receiving our wages through these commercial banks dealing in interest?
Answer:-It is better to find an Islamic bank nearby to channel your wages ,but if not ,then it is allowed to receive wages through a commercial bank.These are your wages ,and you are the one who earned these and worked for these ,and it does not mean that if they are received through a commercial bank,then they become full of interest/victim of interest.

Q4.Offers/Promotions in one of the Saudi Banks.We have a bank which will basically buy anything for us we need ,be it furniture ,piece of land ,car etc.but the conditions are that one has to have a job.I am working somewhere where I am continuously paid for ,and also my wages have to come through this bank and not any other bank,for a period of five years or so,whenever the wages come,the bank will deduct a certain amount out of it,before giving the rest of the amount for me to use.The way they operate is as such
“I go to the bank and I tell them that I want to buy a car.They tell me to go to any company/showroom and choose whichever car you want.Then bring an official paper from that company/showroom ,proving that the car which you want to buy is there ,with the indication of the price.What the bank will do,it will issue a cheque to that company ,with a letter mentioning that the car may be handed over to the carrier of this cheque ,but in the end ,if the car is for example 100,000 Riyals,the bank will add 7% charges to be paid every year by the person buying the car.This is the amount the bank will charge for that service,and I will have to pay the amount in installments as deferred payemnts for the next 5 years.So bank charges 130,000 Riyals for a car which they paid 100,000 Riyals for.Same situation can be applied for purchase of land.Is this type of transaction allowed or not?
Answer:-This kind of dealing is not allowed ,it is haram.Infact it is a loan given to you and then charged more afterwards.AllahYou should keep away from it ,and the one who leaves something for Allah,Allah says
“And whoever fears Allah and put his affairs in His hands ,Allah opens doors for him,and Allah is going to sustain him from ways which he never may have thought.”
We all have our own issues ,expenses to bear ,regarding our sons ,daughters,wives etc etc .But if we go through the right/halal way,Allah will bless us and put barakah in it.

Q5.Question asked from Sh.Uthaymeen.Some of the companies ,they deal like this that if you need to buy something ,car ,etc.the bank will buy it for you,while it will increase on the amount that you will pay?
Answer:-Sheikh has made it very clear ,that it is a Heela(technique) which the bank uses,it just buys that car and put it on the paper,meaning not actually buying ,and then later selling it to you.There is a big Shubha(doubt) in it.So one should keep away from it,since it is a very dodgy kind of transaction.Basically ,what is happening here is that they are buying the good and then selling the good to person at the same time for more price.We have in cases of Inah which is haram,where a person buys a thing from someone on credit ,and then sells it back to the same person at a lesser amount.But Tabarruq is allowed,where you go and buy something ,and then sell the item in the open market for cash which is less,while you have bought it for installments.Basically that good/car belongs to you and you may do whatever with it.Also the condition that the“Property will stand in the name of the seller till the full payment is made.” as per Islamic transaction ,if one buys something ,one is the legal owner of that ,and may do anything with it.This is also haram.

Q6.A man came to me and said”Give me 23,000 Riyals and after one year I will give you a single cab Datsun car model 94(either the Question was asked 16 years back/brand new car or the model of the car is old)Is it allowed?
Answer:-It is allowed for you to give a person some amount of money and then that person gives you a commodity ,here in this case it is a promised car.According to the promise ,whatever he has described the car to be it meets that standard.This type of transaction is allowed and it is a form of Salam,where you pay in advance and receive the goods later. Salam is a sale whereby the seller undertakes to supply some specific goods to the buyer at a future date in exchange for an advanced price fully paid on the spot. Salam is beneficial to the seller, because he receives the price in advance, and it is beneficial to the buyer also, because normally, the price in Salam is usually lower than price in spot sales. The sahabas they came to the prophet (SAW)and said
“Ya RasoolAllah,we have difficulty sometimes when a tradesman will come and he will pay us a certain amount of price for some dates ,which we will sell for cheap price, meaning that normally if it came in the market they would sell it for say 5 or 10 Riyals/Kg,whereas if a trader came to them and paid for the dates one year in advance they would sell it for 4 Riyals/kg at a lesser price ”
Meaning that you need that cash but the trader ,may not be needing as much of the cash ,but the product end of the year ,and also at a cheaper price so he can make more money.So the trader is giving the money in advance for an item that he will receive later.This is allowed.

Q7.Buying of Foreign Currency(Dollars to Riyal) in the bank
Answer:-Allowed with the condition that it has to be exchanged there and then.The payment has to received before you go away.So you go to the bank, for example give them 30,000 Riyals and get 10,000 dollars in exchange there and then,after having completed all the paper work of the bank.In Saudia $10,000 is not a big thing ,there are road side money exchangers,but in other countries like New Zealand ,its notthateasy,one will have to request them earlier for such huge amount ,since mone y exchanging business is in shops ,behind the doors ,unlike in Saudia Arabia where the business is done on streets.But if you are not receiving cash in hand ,then it is not allowed .

Q8.What about receiving a cheque instead of cash?
Answer:-Sheikh Uthaymeen is saying that it is not allowed ,because it has the concept of Riban Nasi’ah(Riba due to delay in payment)because if you receive a cheque ,and you lose it somehow ,then you can go back and request for another cheque ,so Riban Nasi’ah becomes apparent in it.Though others may have different opinions ,but Allah knows best.

Riba Types
1. Riban Nasi’ah
Taken from the word Nasah which means to delay.Here it relates to delay in payment.This is further divided in two types.
• First case , where a person is not able to pay back the loan in time ,due to the difficulties faced by him,so you give him one more year to pay back the loan ,while increasing the amount of interest.This is exactly what used to happen in the days of Jahiliya/Ignorance,where people would lend out money and in case of non-payment in time would increase the interest .This is haram.
• It refers to selling the goods of the same type,but during buying and selling ,you delay the payment of one ,or both of them are delayed.such as selling gold for gold.You take the gold but the other person does not give you the gold,or both of you agreed but did not bring the gold,or even gold for silver or silver for gold.There are two categories,one is gold and silver ,second is dates wheat ,barley ,salt etc.

2. Riban Fadl

Selling of an item for another item of the same type but in excess.The extra which has to be paid in one of the two.If you are selling gold to gold,you cannot increase the amount .It has to be 50 gm-50 gm,however naturally if one is selling gold to silver,then the weight will differ .Same applies for wheat –wheat and barley –barley.1kg barley for 1 kg of barley.If Wheat –Barley then it will differ,but it has to be at the same time.
In different categories ,like from gold to wheat ,it may be tons of wheat for some weight in gold in kg.It is also allowed to delay the receiving in this case,like in (Baye-Salam)Salam transaction,or pay in installments(deferred payment(AlBaye Taqseet)

Q9.I have a farm and registered/certified with the Govt.to produce as a farmer.I produced very little amount of wheat,whereas my brother produced huge amount.I sold my part of my contract to my brother for say 10,0000 Riyals.Then my brother ,he took little bit of my wheat ,then he went to his wheat and produced lots of wheat under my name/certificate. Is it Ok to do that?

Answer:-Not allowed to take another person’s name.As you are registered for yourself yourself,while your brother is not registered under your name.You should be on your own and he on his own.One product cannot be sold under the name of another person’s product.

Example:-Nike shoes , maybe made in China ,but on it is written that it is a product of USA. It can technically mean,that it is made somewhere else ,but the design/money is coming from USA.The consumer ,however has no idea where is the product coming from?This is the way thepeople deceive.It may be made in Indonesia ,and written as product from UK,due to the business people being from UK.This is not correct
Unbreakable:-When they say an item is unbreakable ,and it breaks so its deceiving people.Titanic ship was being made,there was a technical mistake regarding the right amount of iron used ,the owners had given the guarantee that the ship was unsinkable ,but it hit the iceberg it broke ,and sank in its maiden journey.Allah showed them that there is no power above the power of Allah(SWT),we all know this but people tend to forget this .We as Muslims should be humble and bow down to Allah and seek his forgiveness.

Q10. Commercial Competitions ( Again a very old Question coming to the Mashaikhs of Saudia Arabia which shows that if this were the situation of the place at that time ,a place which is considered among the best of the Islamic countries,where Makkah and Madinah ,the two holy places are situated ,what will be the situation now? The place ,the memory of which we all cherish ,when you enter Alharam ,when you go there and pray behind the imam,his voice echoing through thousands of microphones,there is no other feeling better than that,when you bow down in prostration,and when you know these type of things happening there! ,its so difficult to digest ,but this is what is happening there. )

Q10.There are certain amount of competitions where people are encouraged to go and buy goods from people and they use it a s a competition .Names like Musa Baqa Asharookhi ??Musa Baqaa Rasha TIjaraya..
Answer:-Not allowed ,just like a lottery /gambling system prevalent in western countries like UK,USA,Canada etc.
Allah (SWT)says
“Oh..those who believe in Allah ,all these kinds of things ,gambling ,intoxicants ,throwing lots ,ways of Jahiliya, worshipping of idols, all this is part of what the Shaitaan is promoting and whispering ,and victimizing people through, keep away from them, maybe you will become among the winners.”

Example:-Some of the shop keepers they attract customers and give vouchers to buyers.On purchases, the names of the buyers are cast in the lottery ,and winners are given huge prizes.This is all ambiguity ,gambing ,generates hatred amongst people ,as the ones who win they rejoice ,while those who lose develop enmity towards them ,and can lead to fights and at times even murders due to this rivalry.So it is Haram.

However ,having said that ,it is allowed to attract customers ,through deals and discounts (30%,50% etc.) .As in this way ,every customer who walks in your shop, will have the same opportunity with the same benefit.This is OK.

Q11.There are certain companies /banks which offer that if you open an account with them to keep your money there and use it as your bank,there will be lottery ,by picking u of lots.
Answer:-It is haram,because they take your money ,and invest it in haram places ,and through Riba /interest whatever they make out of that ,they put up as prizes.It isgambling as some win while others do not.

Q12.I went to a shop to buy milk for my children,and the sales person said to me that
“We have got a special kind of milk,which if you buy ,you will receive cash ,starting from one Riyal and can be upto 500 Riyals”So hearing about this cash prize ,I ended up buying 4 packs of milk,because I wanted to get that prize,so I found one Riyal each in two of those 4 packs,in the third one I found 10 Riyals ,and in the fourth one I found 500 Riyals.So is that money halal for me,and if not what am I supposed to do with this money?And if it haram,please try to do something about it,so that the common people become victim of such things.Please guide us.

Answer:- You are not allowed to put any form of cash in the merchandise which you are selling,so some will receive ,and others will not.Or any other form of gifts ,which may be in some and not in others,through that you attract people to your shops for sale,and also harm the fair competition ,and others may lose money because of that,while you make money through haram ways.This is not allowed,there is ambiguity ,gharar in it,where some people benefit ,whereas others do not ,so it is not an equal chance for evreryone.Either you return the cash prize back to the owners if you are able to with ease,or else give it in the path of Allah(SWT) for the needy and the poor.
We do know that some times in western countries ,when we buy something ,we do not buy that thing to get any cash prize,but when you buy you find that you have won something ,in some scholar’s view , you should in such a case give the money to needy people.Some other’s scholar’s view is that ,since it was not your intention to buy it for cash,you can keep it for yourself.But in the case of the question posted,the person made his intention clear that he bought the milk packet because of cash,so in this case it is haram money,so either you should give it back or spend in charity.

Q13.Buying newspapers ,because of those competitions which are there ,and there is a cash money involved in that.

Answer:- One should not buy these papers, because of all the haram stuff present there.They do this to promote other things which are haram.

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