Spending the interest-based profits to settle the debts of the company's debtors, whether they are in financial difficulty or not
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Fatwa No. ( 20427 )
Q: The questioner asked a question, the text of which is as follows: In response to your kind request in your letter No. (779/2) dated 7/2/1419 AH, I am enclosing herewith the company's founding contract and basic bylaws that you requested. I would like to draw your attention to Articles (17 and 46) thereof, in addition to a photocopy of the relevant article from the Saudi Companies Regulations. On this occasion, I would like to add an inquiry to your previous inquiry in my letter No. (1206 Sh, Q / 98) dated 9/1/1419 AH, which is that this company has correspondents (interest-based banks) outside the Kingdom to facilitate the company's clients' affairs when transferring amounts to their countries. It is customary in other banks for the foreign bank to pay the value of the remittance on behalf of the local bank, and then the local bank reimburses the foreign bank for the value of the remittance
in addition to the interest-based profit. Out of this company's concern for the purity of its transactions from riba, and so that we are not forced to pay these profits, we make advance deposits with them before the transfer. This way, we are saved from paying them riba, but in this case, they pay us interest-based profit. We set this money aside from the company's funds and do not include it in its profits, and it is spent on charitable works. The question is: Is it permissible for the company to use those funds to pay off the debts of those in financial difficulty who are unable to pay their obligations to the company, thereby clearing their debts, if their financial difficulty is proven and there is full certainty of their inability to pay? And likewise, the deceased debtors of the company whose children are unable to settle their debt after their death, or those who left their heirs nothing but the house in which they reside? Please issue a ruling, may Allah reward you. May Allah prolong your life, Your Eminence, and bless us in it. He is the best of those who are asked.
A: It is not permissible to spend the interest-based profits to settle the debts of the company's debtors, whether they are in financial difficulty or not.
Q: The questioner asked a question, the text of which is as follows: In response to your kind request in your letter No. (779/2) dated 7/2/1419 AH, I am enclosing herewith the company's founding contract and basic bylaws that you requested. I would like to draw your attention to Articles (17 and 46) thereof, in addition to a photocopy of the relevant article from the Saudi Companies Regulations. On this occasion, I would like to add an inquiry to your previous inquiry in my letter No. (1206 Sh, Q / 98) dated 9/1/1419 AH, which is that this company has correspondents (interest-based banks) outside the Kingdom to facilitate the company's clients' affairs when transferring amounts to their countries. It is customary in other banks for the foreign bank to pay the value of the remittance on behalf of the local bank, and then the local bank reimburses the foreign bank for the value of the remittance
in addition to the interest-based profit. Out of this company's concern for the purity of its transactions from riba, and so that we are not forced to pay these profits, we make advance deposits with them before the transfer. This way, we are saved from paying them riba, but in this case, they pay us interest-based profit. We set this money aside from the company's funds and do not include it in its profits, and it is spent on charitable works. The question is: Is it permissible for the company to use those funds to pay off the debts of those in financial difficulty who are unable to pay their obligations to the company, thereby clearing their debts, if their financial difficulty is proven and there is full certainty of their inability to pay? And likewise, the deceased debtors of the company whose children are unable to settle their debt after their death, or those who left their heirs nothing but the house in which they reside? Please issue a ruling, may Allah reward you. May Allah prolong your life, Your Eminence, and bless us in it. He is the best of those who are asked.
A: It is not permissible to spend the interest-based profits to settle the debts of the company's debtors, whether they are in financial difficulty or not.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.