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Halal Investment

I want to know what is your opinion about halaal investment.

1. Is investment in usual banks Halaal?
2. Where investment is Halaal?
3. What about insurance and saving accounts in banks?

Please consider inflation and other logical ideas presented by those who consider this halaal.

Answer:

1. In principle any investment that involves riba (fixed rate of increase of money, related to time, on a lent amount) is haram. If the investment does not involve such riba then it is not haram per se.

2. I think I have answered this one above.
3. Bank interests are usually fixed rate increase of money, as such they are haram. Any such interest that is paid on bank accounts should be taken out…

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Lending, Riba And Infaq

Does Allah announce a reward in the Qur'an (or through Sunnah) for the people who lend their money to a businessperson who already has an established business and wants to expand further? I mean if I lend money to the poor without any riba or profit over it then understandably there are some heavenly gains for me. But interest-free lending to someone who wants to expand his wealth, which of course is not wrong as per Islamic law, so for this sort of situation what heavenly reward is there for me? Does Qur'an make it a subject anywhere? Or did the Prophet (sws) elaborate it any further?

Answer:

Islam encourages given away to those who are in need. It also has specified a heading that can benefit well off people. It says that one expenditure of the zakah in the state treasury is to help the people whose hearts are to be won over for the sake of Islam. It also has heading for the help of those well off people whose business has collapsed. This shows that at times we can give…

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Bribery

Is bribing someone acceptable in island if there seems no other way out? Please explain in the light of the hadith which says that the one giving bribe and the one accepting it both will go to Hell.

Answer:

There are two kinds of favours which are called bribe. When Mr A extends some favours or offers money to someone for obtaining something he does not deserve at all and which involves injustice to other parties it is bribe. It is not allowed to give and take such gifts. The evil in this practice and the injustice involved in the dealing is more than obvious.

There are however, cases when people in authority…

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Working In The Administration Of Bank

I have an option to work in the HR function of a commercial Bank. However, I feel one should avoid working for a bank as it deals in something which is haram i.e. interest My parents view is that interest was made haram because in those days individuals used to exploit the poor through this but now banks lend usually to people who use the money to make more money so there is no exploitation. Please shed light on this issue.

Answer:

Interest is Haram and I do not agree with your parents’ view. In fact even at the time of the Prophet (sws) one of the main purposes of getting loan with interest was commercial as it is clearly mentioned in the Qur'an (30:39).

You are correct that working in banks (although may not be directly committing a haram transaction) is in fact helping and contributing to haram.
However, there is a point that…

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Buying Property On Instalments

Are we allowed to purchase property in a non-Muslim country on instalments where the matter of bank interest (riba) is involved?

Answer:

In our view there is nothing wrong with this kind of transaction on the part of the customer. One certainly needs a lodging to live in. And there are many other situations where one is forced to borrow money from individuals and banks on interest. We believe that religious sources do not object to pay interest when circumstances force you.


However, before taking such loans on interest one must be sure that he cannot…

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Saving Certificates And Riba

Would saving certificate schemes be considered as Riba (interest)?

Answer:

Our teacher, Mr Javed Ahmad Ghamidi, is of the opinion that if the Pakistani government offers financial help to its old citizens on the basis of a scheme, it is okay because it is its obligation to do so. If the government is indulging in riba-based arrangement in doing so, it is not the responsibility of the individual.

My humble opinion is that insofar as simple pension is concerned, the principle is fine. However, if the…

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Bankruptcy In Islam

I am overloaded with debt from Credit Cards and medical bills and my income is less than my monthly expenses and I own very little. My only option is bankruptcy. I am very regretful about getting involved in a credit system which involves interest and for not being able to pay back my debt. At this point I don't have much choice. I was listening to a lecture by a renowned scholar who said: "Debt is not forgiven". I am very worried about this and want to seek Allah's forgiveness. Please advise me about what to do when bankruptcy is my only option. How do I seek forgiveness from Allah for my sin? Please help me brother. I am very worried.

Answer:

We believe that we are obliged to try to fulfill the rights of the fellow humans (and this includes institutions) before seeking God's forgiveness. However, if you think you have exhausted the best of your efforts and find no other way then you can intend to pay off any debts when you are able to do so and continue seeking God's forgiveness. God knows the most inner layers of our intentions and He knows how…

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Overspending

What is excessive spending known as israf/fuzool kharchi in Islamic view?

Answer:

The Shari'ah does not define and delimit extravagance. It leaves a lot of things on human intellect and universal moral principles. It is upon the individual to decide in the light of the sense and reason and the moral values to determine which of his spending come under extravagance and which are not. It also varies from person to person according to their social and financial status.



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Taxes And Zakah

There are lots of people who do not want to pay full tax on their salary. They show their official salary so low that they have to pay minimum taxes Alhamdulillah many in Pakistan and almost everyone in my small company is paying zakat. What I wanted to ask whether paying taxes is as important as paying zakat. Is it one and the same thing? I mean if by zakat formula our zakat payable is Rs 1000 and taxes payable is Rs 1500. Then when we have paid Rs 1500 in taxes do we need to pay the zakah separately?

We have to pay the taxes to the government no matter how corrupt we can claim it to be. But still it needs that amount to run its affairs. And we can see as today petrol prices have been increased by 6 Rs. This is disastrous to a nation. But at their part what can they do. They have to pay for which they need to collect and if we do not pay then they have to charge from us indirectly like this. So isn’t this better to adjust tax from zakat. Instead of saying that because I pay full zakat so I can pay 0% tax. My idea is that by doing so I am only putting my fellow countrymen in trouble. I agree that most of the money would be spent on government luxury but still that is their act. They have to be answerable to this not us. I shall be really thankful for your comments in this

Answer:

We believe that the Islamic Shari'ah does not allow the state to impose taxes other than the zakah unless and until they expressly give the state the right to do so.

The Holy Qur'an has not of course touched the issue of income tax and issues of application of the directives regarding the zakah and other financial matters. What we have to do is explain our understanding of the Qur'anic directives and exercise ijtihaad. Since…

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Wasiyat (Testamentary Wills) In Islam

I am confused about 'wasiyat' in Islam. What is the importance of wasiat in Islam? Can a Muslim make wasiyat for everyone or only for those who are not his relatives? Can he make it for the whole assets or only for 1/3rd? Please answer this through email and do give references from Holy Qur’an and Hadith.

Answer:

Mr Ghamidi's has stated his viewpoint on the issue in one of his articles. He writes:

The Right to Bequeath

The Qur’anic injections regarding distributing of inheritance repeatedly stress the point that the stipulated shares can only be disbursed after fulfilling any testamentary wills left by the deceased. This invites two important questions:
First, has the Shari’ah put a limit the on the part of the wealth to be bequeathed or one can bequeath as…

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Paying Interest And Home Loans

Is it permissible for the Muslims living in western societies (Australia in my case) to use interest based finical products, such as home loan? Some people say that it (home loan) is totally haram. But we seem to have no other option. After all, we need to buy a house of our own. We can't pay rent for the rest of our lives, can we!

Answer:

We believe that we can take loan on interest. In Islam taking interest is prohibited and paying it is not. In fact the Qur’an terms those who have been subjected to pay interest as mazloom (oppressed). For detail please refer to: http://al-mawrid.org/pages/articles_english_detail.php?rid=467&cid=385



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Bank Job Involving Credit Cards And Balance Transfer

I work for a bank and deal with credit card balance transfers. I offer customers of other banks to transfer their balance on other credit cards over to the cards of my bank by offering them lower interest rate. What is Islamic verdict on my nature of job?

Answer:

It is not allowable to devour interest or work for someone devouring interest. However, there are different kinds of jobs in the bank. If you are involved in policy making and you actively promote the cause then your participation is more risky religiously. If however, you are just doing an assigned job your participation may incur less harm. There are jobs which do not even involve any such transactions and one is assigned only for…

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Saving For The Hard Times

Am I allowed to save some for rainy days which is excess to my needs in Islam, and if not what is provision of 2.50 per cent of zakah. It may also be explained that how can a society be developed equally by the ratio of 97.50 percent and 2.50 percent. I am a Muslim but very confused.

Answer:

Any excess to your needs is considered as wealth and Zakah to the rate of 2.5% will apply to it if it is above Nisab. It is in fact timely and reliable discrimination of Zakah that can help with equal development of a society (just as taxes in developed countries are set for the same purpose along with other purposes).



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Drinking, Insurance, And Interest

I have a few questions. My first question relates to the consumption of alcohol. I know it is haram. But living in a western country, where it is part of the social life, one has to mix with the people who drink. I have been avoiding drinking but attended parties and social gatherings where wine is served. Recently I came across a book where it was written that Hadrat Umar (sws) used to punish those people who attended parties like these. Where does Islam stand on this?

Could you please guide me about the Friday Prayers? Is it true that if I missed three in a row I am no more a Muslim? I also wanted to share that I have to pay my car insurance and for this purpose I have to pay interest. Are there exceptions for Muslims who are living in non-Muslim countries?

Answer:

It is not very favorable to join parties in which people usually drink. Such company can lead one to drinking. However, it is not haram to attend such parties. The only thing that is prohibited is drinking itself. As for the importance of Friday Congregation our view can be reached at: http://al-mawrid.org/pages/questions_english_detail.php?qid=40&cid=319&search=friday

We believe that insurance is not haram. Paying interest is also not haram. The Islamic Shari'ah has prohibited taking interest not being subjected…

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Bank Loans And Credit Cards

I am a little confused about interest. Can I take loan or even have a credit card?

Answer:

We can of course take loan and also have a credit card. The Shari‘ah has not dealt with the question of legality of using credit card. As for taking loan it is allowed expressly. There is no difference of opinion on that. As to paying interest to the lender we see that the Qur'an commands to those who had to receive interest from people to forego the money payable to them by way of interest.…

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Fixed Deposit And National Saving Schemes

Is it allowable to:

  1. keep money as a fix deposit for five years in the bank and received a specific percentage on that amount and
  2. keep the amount in Pakistan government policy Qawmy Bachat Scheme?

Answer:

Interest offered by the conventional banks is prohibited and a Muslim should avoid taking it unless his circumstances are compelling. Qaumi Bachat Scheme too comes under the same category. However, if the government offers a regular payment to the old people in the form of pension etc taking it would be permissible no matter how revenue is generated.



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Buy A Care With Installment Payments

I want to ask can I buy a car in instalments from a bank. Would it be licit (halal) or illicit (haram)? Furthermore, what is exact principal stand of Islam about interest? I read your article about interest, and as far as my understanding of your article is concerned, it declares interest halal as long as both the parties are agreed and it brings no financial burden on receiver. Correct me if I am wrong. My second point is not exactly a question. I will be heading to Australia in January next year. I want to preach Islam. Kindly suggest me few books which clarifies prevalent misconceptions about Islam especially related to woman, interest, jihad and social dealings. And also suggest an authentic exegesis (tafseer) of the Qur’an which I will refer to and recommend to my colleagues in Australia if they are interested in understanding the Qur’an.

Answer:

In the opinion of Mr Ghamidi, charging interest is prohibited; however, paying interest as is the case of paying instalments is not prohibited.

You can read his detailed views on this topic at: http://www.monthly-renaissance.com/issue/content.aspx?id=1175

Regarding misconceptions about Islam in particular the topics you have referred to please go through the following ebook: Fifty Common Misconceptions about Islam at the bottom of the page:

As far as exegeses (tafseers) of the Qur'an are…

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Islamic Banks In Pakistan

There are about six Islamic banks working in Pakistan. Some are Pakistani and rest are of different Islamic countries like Dubai, Abu Dhabi, Bahrain, Saudi etc. they tell that their business is looking after by a board of ulema and their business is all Islamic. They announce their profit every month.I want to ask whether it is allowed making investments in fixed accounts of these banks.

Answer:

You are allowed to invest in a business venture about which your conscience is clear that it is acceptable to Islamic teachings. Your conscience can be clear because either you feel confident on account of your understanding which you have reached directly by reading Qur'an and hadith or through a scholar who convinces you that the business opportunity is halal or you rely on a scholar's opinion who says that the opportunity is halal. The…

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Status Of The Current Forms Of Islamic Banking

I am not clear about the concept of Islamic banking introduced in Pakistan. From what I have studied, it looks to me that the new system is actually not Islamic. They are just using the Islamic/Arabic terminology to mislead people and have also introduced lengthy paper work to make all the interest bearing products as Islamic products. Our Muftis are helping them against payment of huge stipends. (I may be wrong and want to correct my perception). I am strictly against Riba and when I tell my friends, they ask about the alternatives or solutions. Here, I do not have anything to say to a person who is employed somewhere with limited salary and no spare time to do or participate in any Halal business beside the trust factor in investing as a silent partner. Please help/guide me in answering these three questions according to your understanding of Islam.

1)Is the current Islamic banking and their products Halal and How?
2)Can we recommend some alternative investment plans to small investors which are Riba free and secure?
3)Can you refer a good book / web source / article to learn in detail about this issue under current economic situation?

Answer:

The answers to your questions are as under:

i. The contemporary Islamic Banking is, in our opinion, partly correct from Islamic point of view and partly not. They heavily rely on Murabaha and Leasing for their business. We think Murabaha is not Islamic whereas Leasing is. So at the moment Islamic banking is doing fifty percent correct business from Islamic point of view.
ii. Islamic funds run by UBL, Atlas Fund, Meezan Bank etc…

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Status Of Income From Pensioner’s Benefit Account

I have to ask that is it Halal to open an account and use profits by Pensioner’s Benefit Account (PBA) under National Savings Organization, Ministry of Finance at National Savings Centre (NSCs)?

Answer:

Our teacher, Mr Javed Ahmad Ghamidi, is of the opinion that if the Pakistani government offers financial help to its old citizens on the basis of a scheme, it is okay because it is its obligation to do so. If the government is indulging in riba-based arrangement in doing so, it is not the responsibility of the individual.

My humble opinion is that insofar as simple pension is concerned, the principle is fine. However, if the…

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