Discussion on the ruling regarding dealing with the Islamic bank?
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The questioner : Back to the beginning, my lord. Our brothers, I hope you will be gracious to us and be patient for a moment regarding the topic raised before lunch about banks, and specifically the Islamic bank. The brother who raised the question... did not organize his question on paper for the Shaykh to accommodate it... Therefore, I spoke with Shaykh Abu Khalil about the topic of the Islamic bank, which has become a source of reproach for us as Muslims because it bears the name of Islam. We are reproached for it by non-committed Muslims and by the Christians and the leaders of disbelief in the country, where this bank has now started offering its shares for subscription and sale in the Amman financial market. This is one thing. On the other hand, this bank has started absorbing the funds of Muslims to invest them in projects, on the condition that these projects return profit to the investor. There are many opinions from many scholars on these projects, some of whom support them and some of whom do not, without relying on a Shari'ah text. The topic of the Islamic bank has been raised in newspapers, on television, and in discussion circles with many Muslim scholars, and many scholars of mathematics, sociology, and others, and they have permitted it. However, this bank, which is now becoming clear in its experience and performance to every observer, has led us to doubt this matter. We are insistent on asking, and I hope the Shaykh will bear with me personally and with my insistence, because there are those who insist on me. Personally, I have not been comfortable at all with the idea of the Islamic bank, because I have not found what justifies my comfort with this idea, or with the giving of this bank, as it represents Islam and bears the word "Islamic," and it is now establishing several branches... in every Arab and Islamic country. And now, if the Shaykh permits me, I will raise a topic on which I stand on a sound position, which is that the Islamic bank has started practicing a new operation, which is participating in government projects that exist in every Arab and Islamic country. It participates with deposited funds, whether these funds are in a capital account or in the accounts of depositors who participate in these projects. The projects established in the Arab world—I say the Arab world and not the Islamic world, because it is not ruled by Islam, and you know that—these projects, these funds that enter into projects, enter through an interest-based method. The evidence for this is that the projects themselves borrow from international disbelieving banks to develop and establish the projects. So how can an Islamic bank lend its hand and participate in these projects with funds called Islamic funds, or funds belonging to Muslims, like our case? This is all I can say after I have learned with full certainty that it participated in projects in this country, the Islamic bank, with amounts exceeding a large number of millions. I hope to receive the answer, and if the Shaykh prefers to postpone it to another date to increase the question and knowledge about the Islamic bank and its objectives and its system, that does not prevent him from being gracious to us now with what will please us all.
The Shaykh : By Allah, the truth is that the research on the Islamic bank is long-tailed and has many branches, and therefore I wished that the question would be limited so that the answer would be so as well. The dealings of the Islamic bank are of types and many types, and each dealing has its ruling in the Shari'ah. You are now presenting an example, and this example may be, I say, may be one of the evidences that the Islamic bank does not deal in purely Islamic dealings one hundred percent. And I say that this example is truly... and the evidence for it is answered by a question, which is: you pointed out, indeed you stated, that there are funds in which non-Islamic banks participate, but what I did not understand is the nature of this participation? I am interested in knowing whether the Islamic bank is carrying out a project, for example, building an interest-based bank, for example, let us say this type is among the evidences that the Islamic bank deals in non-Islamic transactions, or is it taking a fee from those banks for a work that is in itself prescribed? What is the nature of the work?
The questioner : For example, it gives, it participates in one of the projects in a joint-stock company, it participated with half a million dinars.
The Shaykh : No problem, what is the type of work the bank is doing?
The questioner : An industrial project or a commercial project. The bank paid, bought five hundred thousand, it resided with five hundred thousand dinars. At the end of the year, this company distributed profits, so its share by percentage was, for example, eight percent of the value of its contribution in this project. So is the eight percent that it obtained through its contribution in this project permissible?
The Shaykh : I think that this answer has preceded, it preceded in the folds of the previous material, because the company in which the Islamic bank participated, or in which it participated, this one does not deal in interest-based transactions.
The questioner : All of them dealt in interest-based transactions, this is the problem.
The Shaykh : This is what we said just now.
The questioner : This is what we emphasize.
The Shaykh : And therefore, this is not permissible.
Another questioner: ... social security and the housing bank.
The Shaykh : how
Another questioner: ... my Shaykh, or I mean in this period, the Islamic bank, I do not remember exactly, is it the social security or the housing bank that participated with eleven million dinars. Either in the housing bank or the social security.
The Shaykh : Yes.
The questioner : And this, if Allah wills, we will verify it and inform you of it.
... .
Another questioner: Is it supposed to be in Islam what is called joint-stock companies on... what is called?
The Shaykh : No, there are none.
The questioner : There are no joint-stock companies in Islam.
The Shaykh : Glory be to You, O Allah, and with Your praise. I testify that there is no god but You. I seek Your forgiveness and I repent to You...
The Shaykh : By Allah, the truth is that the research on the Islamic bank is long-tailed and has many branches, and therefore I wished that the question would be limited so that the answer would be so as well. The dealings of the Islamic bank are of types and many types, and each dealing has its ruling in the Shari'ah. You are now presenting an example, and this example may be, I say, may be one of the evidences that the Islamic bank does not deal in purely Islamic dealings one hundred percent. And I say that this example is truly... and the evidence for it is answered by a question, which is: you pointed out, indeed you stated, that there are funds in which non-Islamic banks participate, but what I did not understand is the nature of this participation? I am interested in knowing whether the Islamic bank is carrying out a project, for example, building an interest-based bank, for example, let us say this type is among the evidences that the Islamic bank deals in non-Islamic transactions, or is it taking a fee from those banks for a work that is in itself prescribed? What is the nature of the work?
The questioner : For example, it gives, it participates in one of the projects in a joint-stock company, it participated with half a million dinars.
The Shaykh : No problem, what is the type of work the bank is doing?
The questioner : An industrial project or a commercial project. The bank paid, bought five hundred thousand, it resided with five hundred thousand dinars. At the end of the year, this company distributed profits, so its share by percentage was, for example, eight percent of the value of its contribution in this project. So is the eight percent that it obtained through its contribution in this project permissible?
The Shaykh : I think that this answer has preceded, it preceded in the folds of the previous material, because the company in which the Islamic bank participated, or in which it participated, this one does not deal in interest-based transactions.
The questioner : All of them dealt in interest-based transactions, this is the problem.
The Shaykh : This is what we said just now.
The questioner : This is what we emphasize.
The Shaykh : And therefore, this is not permissible.
Another questioner: ... social security and the housing bank.
The Shaykh : how
Another questioner: ... my Shaykh, or I mean in this period, the Islamic bank, I do not remember exactly, is it the social security or the housing bank that participated with eleven million dinars. Either in the housing bank or the social security.
The Shaykh : Yes.
The questioner : And this, if Allah wills, we will verify it and inform you of it.
... .
Another questioner: Is it supposed to be in Islam what is called joint-stock companies on... what is called?
The Shaykh : No, there are none.
The questioner : There are no joint-stock companies in Islam.
The Shaykh : Glory be to You, O Allah, and with Your praise. I testify that there is no god but You. I seek Your forgiveness and I repent to You...