Post by miriammuraba on Oct 28, 2013 22:03:01 GMT 4
here is a paper on banking, a littl older but still:
MODERN ISSUES IN ISLAMIC JUDICIARY - BANKING extract
HIS EMINENCE AYATULLAH SEYYID ABUL QASIM al-KHUI TRANSLATED BY KAMBER ASADI PREFACE
In the name of Allah, Most Gracious, Most Merciful.
Praise be to Allah, the Cherisher and Sustainer of the worlds, Master of the Day of judgment, the one who guides us to the Straight Path, and Peace be upon His Messenger, the Owner of the Great Trusted Legislation and Organizer of the Straight Path as well as on his Progeny.
With the development of world in all spheres of life, it has become necessary for individuals and societies to keep up with the modern changes which affect the day-to-day activities. These changes have raised several question pertaining to various aspects of Islamic economy and other principles in relation to the modern issues, and we deemed it necessary to publish this booklet providing clarifications on several subjects, under the title “Modern Issues”
We trust the believers will find this booklet useful and that it will remain forever a treasure for all of us. BANKING & EXCHANGE
Banking and Exchange institutions fall under the following three categories:
National – This can be either individual or public shares company; Government Bank – This is purely financed by the state; Company – This is financed by Government and Public.
1. It is forbidden to borrow from Bank on interest. It is, however, permitted to buy goods on credit from bank for which the payment is to be made after a specified period with an agreed percentage above market value on the understanding that the bank will re-purchase the said goods on spot at a reduced value and pay cash.
This transaction takes the form of purchasing and selling goods and the amount paid to the bank in excess of the actual value is the bank’s profit and not usury.
In such cases, the amount involved must be commensurate with the actual value of the goods. For instance. Purchasing a matchbox for Dh. 100/- to repay
Dh. 120/- after a period of two months, is considered usury, although it was business transaction.
2. Depositing money in the bank in fixed deposit, savings account or current account which offers a fixed rate of interest, as agreed upon, is forbidden. However, receiving interest without any prior arrangement with the bank, is allowed.
3. Interest received on deposit accounts is to be utilised in accordance with the instructions of the Imam or his representative after obtaining his permission.
4. Borrowing money on interest is considered usury, whether it is throughOverdraft or under mortgage. One can, however, borrow under the pretence of “unknown Owner” after consulting the Imam or his representative and with his permission.
5. Depositing money in any form of account in the bank, with the intention of receiving interest, is forbidden. If, however, there was no prior agreement with the bank with regard to rate of interest and if at the same time, one has no intention of claiming the interest even if the bank does not pay, then in such cases, receiving interest is permitted under the pretence of “Unknown Owner” after obtaining permission of the Imam or his representative. The same rule applies to Company Banks as well.
A Brief Explanation of “Unknown Owner” (Majholul malik)
As we all know. Bank’s activities are not limited to lending money on interest but extend to various other transactions such as buying and selling currencies, importing goods for clients etc. On which the bank earns interest. The amount which the bank pays as interest, may well have been the profit earned by the bank on such transactions.
These are the rules for dealing with Islamic banks. In dealing with non-Islamic Banks, be it private or public shares (company), it is permitted to receive interest and utilise it, without having to obtain permission from Imam. There are no restrictions on borrowing money from these banks.
Letter of Credit for Importing:
To import goods, the importer is required to establish Letter of Credit with the bank and request them to make payments to the supplier on his behalf and in return he guarantees the bank to pay when the transaction is completed or he may have to refer to the locally appointed agent of the said supplier who demand from the importer to make part payment in advance through the bank and the said goods will be shipped in the name of the agent and when the goods arrive, the agent will deliver the goods after receiving the balance of the values.
Letter of Credit for Exporting:
To export goods, the exporter has to establish a letter of credit and the bank on his behalf deliver the goods to the importer and receive the value as has been agreed upon; the bank will then pay the exporter the said amount. Therefore. Letters of Credit, be it for import or export, have the same purpose, i.e. to hand over goods and recover values from the client.
There is however another method of recovering value of the goods sold. Here, the exporter or importer sends a set of invoices through a bank without prior arrangement. The bank offers the invoice to a customer and if he accepts it, then he establishes letter of Credit. The bank acts as a mediator until that transaction is completed.
6. Establishing Letter of Credit with the bank and appointing the bank as agents to perform transactions on one’s behalf, is permitted.
7. Is it permissible for bank to charge interest form a person who established Letter of Credit ? Apparently, it is allowed, as explained below:-
(a) The person established the letter of Credit was hiring the services of the bank, to act on his behalf and as such, the amount charged by bank is considered hire charges.
(b) This transaction can be considered as Sale since bank pays for the goods in foreign exchange which the bank purchases at a profit added in the exchange. The difference between the original cost and the amount charged by the bank is considered the bank’s profit. Therefore, it is allowed.
8. The bank takes some profit on the amount paid to the supplier on behalf of the importer, for a specified period. Is this allowed. Apparently, it is allowed. The bank, in this case, is not lending money to the LC opener; the LC is established for the benefit of the beneficiary, at his request. Therefore, it enters under “Guarantee Disposal Law” and not usury However, if the bank was to lend money to the LC opener for the benefit of receiving interest and also received such amount on behalf of the supplier, then it is forbidden unless the amount was received in lieu of a job done or a service rendered.
The bank may store goods for the account of importer if there is such an agreement between the bank and the exporter and when the bank pays for the goods. On arrival of such goods, the bank hands over relative documents to the importer with intimation or arrival of goods. If the client fails to receive the goods at given time, the bank takes over the goods and stores it for the client’s account with specific rental without prior arrangement or agreement, the bank may store the goods for the account of the exporter and may offer the goods to other merchants for disposal.
9. In both the above cases, the bank is allowed to receive commission for such services if it is stipulated in the agreement or requested by parties concerned; otherwise, the bank is not allowed to receive such commission. There may be cases where the bank auctions goods which the importer failed to take delivery of, inspite of reminders from the bank can a bank auction such goods and receive the values thereof? Is a person allowed to buy such auctioned goods? Apparently, it is allowed.
In such instances the bank performs the duty of an agent of the owner of goods and in accordance with the agreement entered into between them. Therefore, selling is allowed and so is purchasing.
Bank guarantee is an undertaking of payment by the bank in favour of a person for the benefit of another person or company to compensate for possible loss or damage arising out of beneficiary’s failure to fulfill his obligations. For example, a contractor is usually required to produce a bank guarantee to the client for a specified amount which will be utilised in the event the contractor fails in the event the contractor fails to meet his contractual obligations resulting in loss to the client.
a) Such guarantee is correct and allowed. Obligations by words are to be fulfilled by actions, just as a debtor is obliged to honour his words and repay his debts.
b) The contractor is obliged to honour his guarantee and if he fails to fulfill this, the client can approach the bank and demand utilisation of the said guarantee and in return, the bank recovers the amount form the contranctor.
c) Is it permissible for bank to charge commission for such guarantee?
Apparently, it is allowed, as this can be considered as fees for the guarantee.
Public companies may ask the bank to act as their agents for selling their shares and to negotiate on their behalf and charge a specified fees for their services.
10. This is permitted. It can be considered rental charges since the company hired the bank for a job; it can also be considered wages for the job done by the bank; in both cases, the transaction is correct.
11. The bank is allowed to deal in selling and buying these shares, if it public shares, but if the shares are to be used for usury, then it is not permitted to deal in it, even though it is in the name of a company.
Bank Draft __ (Local & Overseas):
a) Banks issue draft against payment of the value of the draft plus bank’s commission, in favour of their client for a specified amount payable at the bank’s branch or their correspondent, locally or overseas. The bank is entitled to receive commission on such drafts, as the bank can very well refuse to honour its obligation by not repayint the amount and since they have forfeited the right of refusal, they are entitled to the commission.
b) The bank issues a draft to a customer on loan basis if he did not have fund to cover the draft. In this case, the bank is lending money to the other party at the request of the customer and as such, the bank is entitled to profit, as this falls under services. Moreover, if the draft is made payable overseas, then foreign currency is also involved. The bank, having forfeited the right of refusal of payment, is allowed to receive commission.
c) A person who is not an account-holder gets draft from the bank by paying cash for the value of he draft and commission. In this case also, commission is allowed.
a) The bank is selling a local currency against foreign currency; therefore, the bank is allowed to receive commission.
b) Usury is forbidden in lending. Since the lender receives more from the borrower. However excess amount which the borrower takes from the lender is permitted as this does not fall under the Usury.
c) Bank demands commission for transferring amount from one bank to another, be it local or overseas. Is this allowed? Yes, but on two conditions: First, the transfer of amount should involve selling local currency and buying foreign currency; i.e. receiving in local currency and to pay in foreign currency. Second, commission to be paid to the bank on consideration of non-refund by the bank to fulfill their obligation in a different country where the payment was made to them. This is applicable to individuals as well.
12. There is no difference in rules regarding funds used for draft or transfers, whether a person deals in his own funds or borrowed from the bank.
The bank at times runs lottery and offers prize to the winner.
13. Is the bank allowed to run such lotteries? If the bank is conducting the raffle without any conditions from their customers, but only to promote their business, then there is nothing wrong with it and whoever wins is allowed to receive the prize amount, as this falls under Unknown Owner after obtaining the consent of the Imam or his representative, in case of Government banks or Company banks. In case of Public or individual banks. This permission is not required. However, such raffle is not allowed if the prize amount is paid to a customer under an agreement for loan etc. even if amount is paid after winning the raffle, as this was previously promised by the bank.
Discounting Promissory Notes:
One of the services of the bank is negotiating Promissory Notes with a party for the benefit of their customer. The bank notifies the party the due date of Payment, amount and the number of Promissory Notes and when the bank receives the amount they credit their customer’s account with this amount or pay the sum in cash. The bank charges a commission for this service. Similar service is also available for customers on promissory notes from overseas parties. Sometimes, a customer requests bank to receive amount on his behalf without promissory note which the bank does and charges a commission thereon.
14. This is permitted provided the bank receives the value of the Promissory Notes but if it includes money earned on interest as well, on the promissory note, then it is not allowed. Commission charged by bank is considered as wages for their services.
15. Drawer of a Promissory Notes approaches his bank for negotiating the Promissory Note to the Bank on due date for payment. In this case, the bank is not entitled to any commission.
If the beneficiary of a Promissory Note approaches his bank for negotiating the Promissory Note, the bank is entitled to commission as mentioned earlier.
If a Promissory Note is accepted by a customer although he is not the drawer then in such cases, the bank is allowed to charge commission.
Buying & Selling Foreign Currencies:
Banks activities include buying and selling currencies in order to make currencies available for use of public and also to make profit.
16. It is permitted for the bank to buy and sell currencies on profit or loss or at percentage .
Customers operating current account with the bank allowed to draw amount up to the level of their deposits with the bank. However, sometimes, with the consent of the bank , they are allowed to draw amount in excess of this up to a specified limit for which bank charges interest.
17. Is the bank allowed to charge interest? Obviously, this is not permitted since this falls under usury; but if one abides by the rule mentioned in No. 1 then it is permitted.
Bonds or Hire Purchases:
This falls under two categories:-
First: To be beneficial in purchasing on Hire Purchase such as food, beverages, dresses etc.
Second: To attach value by those who are authorized to give value such as the government who gives value to bank notes, stamps etc. (This pertains to Bond.)
18. There are advantages in selling over lending.
First: In purchases, ownership exists. The seller transfers the ownership to the purchaser and demands value of the goods in return. Debt develops by owning a thing and promising to pay later on either in the form of the same thing or its cost.
Second: Exchange between commodity and its value is sale. Without this there cannot be sale or legality of debt. Supposing you sell 100 eggs in return for 120 eggs there has to be positive distinction in quality of the original and the substitute commodity, to make up for the difference in quantity of eggs in return is more. Otherwise it becomes usury which is forbidden.
Third: Purchase is different from borrowing on interest. In borrowing, any increase in the amount to be repaid, takes the form of usury which is forbidden unlike purchases. It is unlawful purchase when the article offered in sale and the article given in return are identical yet different in size measure or weight. This is considered usury. For example, if a person borrows one hundred eggs to return one hundred and twenty eggs of the same size after two months, this is usury but if the eggs sold were bigger and the 20 extra eggs are to make up for the difference in size, then it is lawful.
Fourth: Selling on interest is forbidden whereas borrowing on interest is legal except that the added part which covers the interest is illegal, but the original loan is legal.
19. Bank Notes can be sold for lesser value since it is not weighed or measured in transaction. For example if one has “I owe you” note from someone for Dh. 100/- he can sell it to another person for Dh. 80/-
20. Promissory Notes which are negotiated between merchants do not carry the same value as bank notes. It is only a document proving the debt of a person who purchased goods on credit. When the purchaser pays against a promissory note he is paying for the goods which he purchased on credit and if promissory note is destroyed, the dept still exists and has to be paid by the debtor unlike the bank note which, if destroyed, is lost.
21. Promissory Notes fall under two categories:-
a) Admitting actual debt;
b) Pretance of accepting a dept which does not exist.
In case of the first category, the creditor is allowed to sell the dept to another part for a lesser amount; i.e. the creditor holds a promissory note from someone for Dh. 100/- he is allowed to sell it to another person for Dh. 80/- However, he is not in permitted to sell that debt for another debt.
In case of the second category the creditor can not sell the promissory note since it does not cover any actual debt but is merely a promises of payment such promissory notes are called “Cordial Promissory Notes” and my cover a commission or similar amounts. In such cases, the Payee can ask the drawer to sell him the said promissory note for a lesser amount, but discounting is not permitted as there never was any actual debt on the drawer.
Banking activities can be categorized as follows:-
a) Business in usury. This is forbidden and one must not participate in any form of this activity and must not receive wages on such activity.
b) Permissible: It is permitted to participate in activities which does not involve usury and can receive wages.
22. Law of usury is same, be it an Islamic or non-Islamic Bank. However, in case of Islamic Bank, the available amount falls under ‘Unknown Owner’ and must not be utilized without the prior consent of the Imam or his representative. But amount available in non-Islamic Banks should be takes as Savior which does not require permission from Imam or his representatives.
Bills of Exchange:
A bank makes payment to a supplier upon instruction from their client, of an amount due by him to cover the cost of goods he has received. The client may ask the bank ether to debit his account with them or pay cash to cover the bill. In both cases, the deal is legal and correct.
23. Is the bank allowed to receive commission for such service? The answer is : Yes, since the bank has refrained from using the ‘Right of Rejection’ they are allowed to charge a fee.
24. There is no difference in the rule relating to Bills of Exchange with any bank, be it Islamic or non-Islamic, since negotiations of bills of exchange are all one and the same.
Insurance policy is an agreement between an insurance company and an individual whereby the insurer undertakes to compensate for loss or damage of the subject of insurance for a specified period, against payment of annual, halfyearly, quarterly or monthly premium by the insured.
25. Insurance may cover life, property, vehicles, aeroplane or ships, against partial or total loss
26. The insurance has to request the insurer for insurance cover, giving details of the subject to be insured and mode of payment of premium etc. The insurer then accepts the proposal.
27. The insurer then considers the insured’s request and accepts the risk. They specify the premium for the value of the risk covered and issues the insurance policy.
28. Insurance is allowed in all its forms. The insurer is taking the risk of compensating loss and the insured is paying for this.
29. If the insurance company fails to fulfill its obligation, the insured can cancel the policy and demand refund of premium.
30. If the insured fails to pay the Premium as agreed upon, the insurer is not liable to honour any claim or refund any premium paid by the insured.
31. Insurance cover is for a specified period as agreed by both parties.
It is customary in some countries to charge goodwill on property deals. At times, a tenant refuses to pay increased rent and instead of vacating the premises, he hands it over to another tenant after receiving a goodwill amount, without the consent of the landlord. This is not allowed since the property negotiated by the tenant, does not belong to him. If, however, the landlord has no right to increase the rent, or demand the place to be vacated, theTenant is then allowed to negotiate with a new tenant and receive goodwill from him.
32. If there exists a rent control law enforced by the state, the landlord will have no right to increase rent or to demand the property to be vacated. In case the tenant, taking advantage of these restrictions, negotiate and receive goodwill from a new tenant, it is forbidden.
33. If there is no rent control law, the landlord may charge a lower rent than the prevailing ate, but takes goodwill while promising of maintain the same rent at renewal. In such cases, the tenant is allowed to negotiate with a new tenant and receive proportionate amount of goodwill.
BANKS SOME QUESTIONS
Is it allowed to deposit money in a non-Muslim Bank in order to earn interest?
A) It is permissible to deposit money in a non-Muslim bank with the condition of interest because it is permissible to earn interest from non-Muslims.
Q) Is it allowed to get a loan from a non-Muslim Bank with the condition of paying interest?
A) One can technically get out of the prohibition by taking the money from a non-Muslim Bank with the intention of istinqadh – that is, using the wealth of non-Muslims which is available to you from them willingly, according to their own laws. In this case, use of that money will be permissible even if one will be forced to pay interest.
CLARIFICATION (provided by Sayyid Muhammad Rizvi)
I have written to Ayatullah Sistani about taking a loan in which one knows that he will end up paying the interest: is it a sin to pay interest in such a case which one has imposed on oneself?
His answer was that it is not considered a sin, because technically, he considers the charging of interest by the creditor as unjust and usurpation.
For the sake of clarification, I will translate the question I wrote to
Ayatullah Sistani and his answer (dated 12 Shaban 1417):
Q. "In Minhajus Salihiyn (v. 1, p. 430), you have written that taking a loan from a non-Muslim bank with the niyyat of istinqaz (that is, taking advantage of a non-Muslim's wealth which he is willingly placing at your disposal) is permissible. Now suppose that a person takes some money from a non-Muslim bank with the niyyat of istinqaz to buy a house or to invest in a business fully aware that as result he will have to pay interest when he pays back the money to the bank --- in this case, is such a person committing a sin by paying the interest? Even though he took the money with niyyat of instinqaz, he knew that finally he will end up paying more as interest."
A. "If he takes the money from the bank not as a loan but with niyyat of istinqaz, then the extra that the bank will forcefully take from him is not considered as interest because interest is the extra payment which is a condition in loan."
Q) What is the ruling about the use of Credit Cards?
A) Using Credit Cards as a convenient way of shopping is permissible. However, it is Haraam to delay the payment because that entails paying of interest. (Of course, using the concept of istinqadh mentioned above, it would be permissible to use Credit Cards as means of getting a loan.
Q) Am I allowed to buy a car financed by the Bank and pay back through installments to the Bank with interest?
A) Based on using the concept of istinqadh mentioned above, getting the money from a non-Muslim Bank would be permissible.
NOTE: Sayyid Muhammad Rizvi writes:
However, the option of “lease to own” is probably the best from the Islamic point of view; you pay more than the normal price but it is not as interest. Let us hope that this concept of “lease to own” is made available by the Financial Institutions towards purchases of homes; this will greatly eliminate the problem of paying interest on home mortgages.
Q) Is it allowed to make use of services provided by the Bank, i.e. transferring money, letter of credit, etc. as they impose charges?
A) Using such services of the Bank like transferring money and opening Letters of Credit to import good is permissible and the Banks are allowed to charge commission for their part of the job.
Q) Does the Shari’ah allow working in the Banks or Financial Institutions?
A) The activities of a Bank are divided intwo: Halaal and Haraam.
Working in sections where interest is involved is Harram. The earnings received from such work is Haraam. Working in sections where interest is not involved is Halaal. This ruling according to Ayatullah Sistani is relevant to Muslim Banks and customers only. Therefore, if the Bank in which in which you are working is a non-Muslim Bank and/or the customers are non-Muslims, then dealing in interest with them as a Bank employee is permissible; and the earning received from this work is Halaal. (As-Sistani, Minhaj, vol. 1, p. 448)
Q) Is it permissible in investing with Mutual Funds, the Stock Market and Bonds?
A) Investing in Mutual Funds and the Stock Market in which returns are not guaranteed would be permissible. Such investments, however, could become Haraam because of secondary reasons: like if one invests in a Company that deals in Haraam commodity, such as a Brewery or Casino. The best option for a Muslim investing in Mutual Funds would be the “ethical funds” since such funds do not deal in alcohol, tobacco, gambling or environmentally harmful products.
Interest-bearing bonds would be allowed except from Muslim Banks as per the ruling of Ayatullah Sistani Dama-Dhilluhu.
WORKING IN BANKS MORE QUESTIONS >We can categorize these problems into 3: >1-working for a business that earns from Haram ways most of the time. >2-working for a business whose earnings are mixed Haram and Halal. >3-working for a business whose earnings are mostly halal but > is involved with some unlawful practices such as taking loans. > >For 1. and 2. maraje' have different opinions.> >1. If a marja' does not see it wrong to work for a bank as long as the >employee's job is NOT directly involved with the Haram act (like >cashing interest, signing off to the loans, negotiating, etc..) then >the same applies to a non-banking institution where the employee's task >is not involved directly with a Haram act. > >BOTH, the maraaje's who categorically prohibit working for a bank - >because most of its earnings are from Haram resources- (those maraje') >do prohibit as well working for a non-banking business most of whose >earnings are from Haram ways. > > >2. Marhoum Sayid khoei even goes beyond that to banning working for >businesses that sell Haram products even though they sell Halal >products as well (Such as a grocery store). Sheikh Tabrizi follows with the same: ><http://www.tabrizi.org/index1.php?W3Village=esf/a/107>http://www.tabrizi.org/index1.php?W3Village=esf/a/107
> Q:what is the ruling of someone working in a store that sells among >many things, alcohol and pork, knowing that his intention is just to >suffice himself and he cannot find another job and he cannot even save >much from his wages. (my comment:the question is emphasizing the need >to work for food and shelter) A:It is not allowed for a Muslim to work >in such stores due to the weakness it reflects on Muslims; besides, the >Halal jobs are plenty, and -quoting>Quran- whoever fears Allah, He would open an exit for him and bring him >sustenance from where he would not expect" -Allah knows best. > > That was from Sheikh Tabrizi. >However, Syd Sistani does not see a problem if the worker's tasks are not directly involved with the Haram. (See below) > >3. Your question falls under 3 which is less restrictive.If the business takes a loan as part of its financing, this by itself is not >related to the actual earnings. So even there Sayyid Khooei would allow that.
> >In summary, we need to focus on 2 things: >- whether the business/corporation is majorly involved with haram earnings here Syd Sistani's ruling is that it is ok to work for them as long as your > tasks themselves are not involved with the Haram, and do not pave the way for the Haram. > Other maraje' may have differnt rulings like Sheikh Tabrizi for example. > >- whether the employee's job is directly involved with the Haram act (serving alcohol, paying or receiving interest, selling lottery, ...)> Here all of them find it Haram to do that job. > > (there might be some detailed differences when it comes to serving non halal meat to non muslims. We have to dig more.) > >The following are from>http://www.sistani.org/html/ara/menu/4/?lang=ara&view=d&code=54&page=17
>Q:A man works for McDonalds which doesn't sell alcohol but sells pork. >He sometimes cooks the meat and served it to non-muslims who consider it halal. Is that ok? >A:Based on obligatory precaution, he must avoid serving pork even to >those who consider it halal, although cooking it is allowed.
><http://sistani.org/html/ara/main/index-istifta.php?page=4&lang=ara&par >t=4>http://sistani.org/html/ara/main/index-istifta.php?page=4&lang=ara& >part=4 > >Q: can one work in a restaurant that serves alcohol where the worker does not serve alcohol himself, but sometimes washes the dishes? > >A: cleaning the dishes/bowls is Haram if this paves the way to drinking or serving alcohol to others.>(my comment: this means that if those dishes are used for other purposes as well, then it would be ok). > > >Can one work as a host for an airliner that permits and serves alcohol on board, and where the host(ess) is obliged to serve alcohol? >A: it is ok to work for them but not to serve alcohol. > >> >Q: A store sells among many halal things, lottery tickets. Is it ok to work for them? >yes. > >http://www.sistani.org/html/ara/menu/2/books/2/inside/189.htm
> > Q:is a Muslim allowed to work in a grocery store that partially sells alcohol, knowing that his job is a cechier only. >A:HE is allowed to accept money for non-alcoholic items; moreover, he >is allowed to accept the price of alcohol in case the seller (owner) >and the customer are both non-Muslims. >
>>If the ruling on this particular question you just asked is very >>restrictive, many of us would be in a dilemma. As you know, most >>organizations rely on some level of borrowings to finance their >operations. Most of us work for such entities I would assume. >> >>As a side note, my current employer is exceptionally unique in that >>they have zero debt on their books and do not use any kind of debt >>instruments to manage their financial needs. This is rare even for a private entity.>>What concerns me about my current employer is that a couple of their >>products are used to assist some defense related operations. I am not >>sure where to draw the line on this one.....perhaps it is best for us >>to become self-employed and have better control of our source of income.
>>>>Thanks, this is useful. I would also like to know the position of >>>working in a non-banking organisation that takes interest-bearing >>>loans from banks (Muslim owned or western) to finance some of its >>>activities. Any references to rulings would be appreciated. >>>
>>> >salam, >>> >As you know, this issue is not so simple. Many factors are involved: >>> >whether the bank deals with interest, whether it is in an Islamic>>> country, >>> >whether it is owned by muslims or non muslims, by a government or >>> >by individuals, whether the moneys deposited are muslim-owned or not .. >>> >To make it simple, in general, most maraje' do not allow working >>> >for>>> banks >>> >if the job entails dealing with interest and related matters >>> >(signing documents, contracts, depositing or withdrawing ...) Some >>> >maraje' (like Sayid Khooei (ra)) even disallowed working at a bank >>> >categorically, even if the job is a jantor. >>> > >>> >Today, most of them allow working for a bank if the job is not >>> >related to the interest transactions such as a computer programmer, >>> >... Sayyid Sistani has mentioned in one of the books (below) that >>> >applies to muslims in the west: He classifies banks in the west as >>> >non-muslim owned, and not run by muslims money (for the most part), >>> >therefore, the interest >>> received>>> >from the bank to you is not ribaa, and these transactions are ok. >>> >Therefore, a person can work for such banks. However, taking an >>> >interest-based loan from these banks is still prohibited with the >>> >intention of interest etc.. >>> >Here are a few links/excerpts.
Despite best efforts for years we have not been able to finalise a one pg paper for practical use, for bank deposits only esp in gulf countries where the banks can be considered to be muslim banks. Conflicting views have come & all italics atleast need reconfirmation.It would be v useful if you can help as many people dont know about this & may use haram money.
I. Classification of Banks (for the purpose of banking sharia rules)
A.MUSLIM Bank (in any country incl kafir country) (m)
1a. 100% private (mp)
1b.100% government(need not be Islamic system)? (mg)
1c.Mixed (even if v small %of either pvt or govt) (mm)
B.KAFIR Bank(including kafir govt) (k)
1a. In muslim country (majority citizens are muslims) (km)?
1b. In Kafir country (kk)
Definition of Kafir bank( Urf?)no
In case of a mixture of Muslim & Kafir Bank rules of muslim bank will apply
Issue of Keeping deposit & taking interest
i Ayatollah Khoie ruling.The initial niyat should be that interest will not be demanded if not given,for all types of banks.(However one can even sign any document with any clause.)
*For mp bank
It is ok to receive & keep full interest.
*For mg,mm&km banks(Majhool ul Malik?)
Permission has to be taken from Marja/Vakil AND 50% of interest amount received is to be given as sadqa.(will be determined by live mujtahid.After passing agha khoi 50 % is'nt appplicable)
General permission can be taken or may be required every timeif mujtahid wants he can give general permission valed till his death
*For kk bank
It is ok to receive & keep full interest.
All these rulings including 50% is applicable even after passing away of Ayat Khoie.no
Other marjas ruling if less than 50 % cannot be used by mukallid of ayat khoie?
iiAyatullah Seestanis ruling
The niyat definition is different.The niyat should strictly be for safekeeping or other than to receive interest.(in book of agha sistani the masala of condition is this ;while depositing the amount one should not put the condition of intrest )
Same ruling then applies for the different types of banks as that of ayat Khoie
Except that in case of km bank it is 100% ok to take the interest amt?
Principal amount remains unaffected & can be withdrawn despite being deposited in mg,mm,km banks& getting mixed with other money