The Ruling on Investing a Project with a Bank
Machine translationRead the Arabic original
The questioner : O Shaykh, what is called bank interest is on investment, not on loans; you deposit an amount in the bank and it comes out to you—for example—a profit of ten percent.
The Shaykh : It is a myth, O Umm 'Umar, it is all riba!
The questioner : I mean, how is it similar to riba, O Shaykh?
The Shaykh : It is riba, my brother! What is the similarity?!
The questioner : A person invests it, I mean.
The Shaykh : Invests it?
The questioner : He opens a project—for example—he brings in profits and gives you a percentage of them, and it is in the bank.
The Shaykh : A fixed percentage? First, what is this percentage? Second, what is the work in which he works? All of this must be clarified. This is called mudarabah. So, for example, you have capital and I have effort and work, so you give me this money and I work with it and trade with it, and we agree that half is for us and half is for you, or a quarter is for me and three quarters are for you, and so on. But a fixed, cut-off percentage, whether there is profit or loss, this is not permissible. This is gambling.
The questioner : The evidence, I mean?
The Shaykh : You have no business with the evidence—may Allah guide you—this is not the time for research. This matter is clear. Riba is forbidden by the Book, the Sunnah, and the consensus of the Ummah. So any matter that deviates from the Shari'ah rules is not permissible. It is either riba or haram illicit gain.
The questioner : Shaykh, okay, now I agreed with a person to—for example—utilize my money for a fixed profit, like half for me and half for him.
The Shaykh : O Shaykh, you are repeating my words, may Allah guide you... from your side immediately.
The questioner : So if the money is lost now, on whom is it... on me or on him? If the trade is lost?
The Shaykh : If you are the owner of the money and he is the owner of the effort...
The Shaykh : It is a myth, O Umm 'Umar, it is all riba!
The questioner : I mean, how is it similar to riba, O Shaykh?
The Shaykh : It is riba, my brother! What is the similarity?!
The questioner : A person invests it, I mean.
The Shaykh : Invests it?
The questioner : He opens a project—for example—he brings in profits and gives you a percentage of them, and it is in the bank.
The Shaykh : A fixed percentage? First, what is this percentage? Second, what is the work in which he works? All of this must be clarified. This is called mudarabah. So, for example, you have capital and I have effort and work, so you give me this money and I work with it and trade with it, and we agree that half is for us and half is for you, or a quarter is for me and three quarters are for you, and so on. But a fixed, cut-off percentage, whether there is profit or loss, this is not permissible. This is gambling.
The questioner : The evidence, I mean?
The Shaykh : You have no business with the evidence—may Allah guide you—this is not the time for research. This matter is clear. Riba is forbidden by the Book, the Sunnah, and the consensus of the Ummah. So any matter that deviates from the Shari'ah rules is not permissible. It is either riba or haram illicit gain.
The questioner : Shaykh, okay, now I agreed with a person to—for example—utilize my money for a fixed profit, like half for me and half for him.
The Shaykh : O Shaykh, you are repeating my words, may Allah guide you... from your side immediately.
The questioner : So if the money is lost now, on whom is it... on me or on him? If the trade is lost?
The Shaykh : If you are the owner of the money and he is the owner of the effort...
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.