Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Assalamo alaikum bro burhan,

Brother although it is clear from the following explanation that shares & mutual fund investments are halaal but taking interest from FD or saving A/C is haraam, but it is justified if we consider that value of money is also depreciating over time. I mean today if I have 100 Rs ( submitted in FD) but after 3 years it market value has become 80 Rs., then in that case isn’t the interest given by bank is justified as practically I am not getting 120 Rs but 100 only (keeping money depreciation in account.)

If it is not halaal even, then where to keep all saving if not in bank?. Or is it justified to give away that interest declared by bank in charity?.

Plz help brother

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Answer:

The taking of interest riba

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

First and foremost, to assume that the concept of ‘inflation’ is a new concept and was not present in the ‘olden’ days is an absolutely incorrect statement….for the economic reality of ‘inflation’ is a derivative of the timeless notion of supply and demand of goods and/or services and/or the mode of exchange (money). To claim that the concept of ‘inflation’ was not present at the time of the Revelation of the Quran is to base one’s assumptions on an absolutely false hypothesis!

Secondly, the fixed rate of return as interest one receives by simply placing the funds in an interest-bearing account in a conventional bank puts the full risk on the shoulders of the person who borrows the funds from the bank on interest. Regardless of whether the person who borrows the money from the bank makes a profit or a loss, the account holder is liable to receive a fixed rate of return……Islam guides that such a transaction is absolutely unfair and unjust and puts the well-being of the borrower at severe risk, while the other party simply sits and ‘sucks the blood’ of the borrower! Under any and all circumstances, the guidance of Islam has categorically declared unlawful all forms and manifestations of injustice.

Thus the forbiddance of ‘riba’ or usury/interest has absolutely nothing to do with the concept of inflation…but rather it is related to the concepts of justice, fairness, and well-being of all concerned.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:

But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch. They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam. Henceforth, if one abstains from taking ‘riba’ after receiving this admonition from his Lord, no legal action shall be taken against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after this, he shall go to Hell, where he shall abide for ever! Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:

That they took ‘riba’, although they were forbidden. And that they devoured men’s substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!

Allah Says in the Holy Quran Chapter 3 Surah Ale-Imraan verses 130-132:

130 O ye who believe! Devour not ‘riba’ doubled and multiplied; but fear Allah; that ye may (really) prosper.

131 Fear the Fire which is prepared for those who reject faith.

132 And obey Allah and the Messenger; that ye may obtain mercy.

Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib

Ali said he heard Allah's Messenger (saws) invoke the curse of Allah on those who took usury, those who paid it, those who recorded it, and those who refused to give sadaqah.

Respected brother in Islam, Allah and His Messenger (saws) have declared every aspect and every manifestation of the abomination of ‘riba’ as absolutely forbidden and unlawful for the believers who sincerely fear Allah and the Last Day; thus let no one convince you otherwise!!!

Your Question: ….if it is not halaal even, then where to keep all saving if not in bank?

Islam discourages the believers to ‘hoard’ or ‘save’ wealth, but rather guides and encourages the believers to invest their money so that both, they themselves and the society at large, may benefit from their investment.

Your Question: ….Or is it justified to give away that interest declared by bank in charity?.

It is not as if it is deemed permissible in Islam for one to continue taking interest as long as one spends it on charity; for Allah does not accept anything in His Cause unless and until it is pure and lawful.

Sahih Muslim Hadith 2214 Narrated by Abu Hurayrah

Allah's Messenger (saws) said: ‘O people, Allah is Good and He, therefore, accepts only that which is good!’

Now the question arises what should one do with the interest money one has already accumulated in the past in ignorance of the Laws of Allah?

For the unlawful ‘interest’ money that one has accumulated in one’s past in ignorance of Allah’s Laws, the person has two choices:

1. One may leave it in the bank.
2. Or, one may take it and dispose it.

Some scholars are of the opinion that it does not help the cause of the believers to leave the interest in conventional banks for at best it helps them to generate more interest, and at worst, they may dispose it to an institution which might work against the Cause. In cases where one has already accumulated interest money in ignorance of Islamic Law, and Allah Subhanah has guided them, and they now wish to dispose off that illegal money, the scholars are of the opinion that one may take this interest with the intention that he wants to rid himself of this evil thing, and give it away to some charity without seeking any reward from Allah Subhanah for this spending. His only intention should be to get rid of this unwanted and illegal money, and thus purify himself from the evil of ‘riba’. The believer who does this only because he fears the accounting of Allah on an Inevitable Day, will, if Allah Wills, be rewarded for keeping himself pure from the evils of ‘riba’.

The spending of illegally and unlawfully earned wealth does not have any worth in the Sight of Allah; for Allah is Good and Pure, and He accepts only what is good and pure.

The issue with the illegally and unlawfully accumulated money is not how best to spend it, but how soon can one rid himself of this illegal and unlawful wealth. His only intention in giving this money away should be to purify oneself and get rid of the evil that is with him. This illegal and unlawful money earned from interest can be compared to a burning coal in one’s hand! When one unintentionally and accidentally holds a burning coal, his only intention is to get rid of the burning coal from his hand; not where best to place it so that it can be of some benefit!

If one trusts, obeys, and follows the guidance and commands of Allah and His Messenger (saws), one can be assured of never ever being misled; but if one believes, obeys and follows any other guidance, other than that of Allah and His Messenger (saws), one can be assured of being led astray.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan