What is the ruling on placing the funds of the Orphans' Fund in the Central Bank?

The questioner : We learned something new from you in the previous session, which is the necessity of paying income tax to the state, even if the system of governance is not Islamic.

The Shaykh : Yes, indeed.

The questioner : And we understood why. Today, I was speaking with a friend who had sent a telegram to one of the members of the National Assembly regarding the issue raised about placing the funds of the Orphans' Fund in the Central Bank or other banks. It appeared that the Minister of Awqaf was adopting the idea that these funds should be placed in an Islamic bank, under the assumption that Islamic banks are non-interest-based banks.

The Shaykh : There is no doubt that this is saying "Islamic socialism," by analogy with Islamic banks and Islamic songs, by analogy.

The questioner : I was speaking with a friend, and he read me the telegram. He told me, "I sent this telegram to so-and-so, and I included a text in it saying, 'Enough of this hypocrisy; what is this hypocrisy?' and I took a text from an Arab writer whose opinion they are adopting. I hung up the phone after that. I then went to perform the Duha prayer, and I was just about to stand up when another phone call came from the other party, from the other side. He said, 'Your friend sent a telegram to so-and-so, and so on.' The other man wanted to clarify his position. He said, 'I did not demand that the funds of the Orphans' Fund be invested in interest-based banks. I demanded that the funds be deposited in the state bank, which is the Central Bank. As for the investment of the funds, that is to be handled by the supervisory council for receiving the funds, headed by the Chief Judge.' I truly, when the first man who sent the telegram called me, I told him, 'If his defense is that there are no true Islamic banks in the country that apply the law of the Lord of the Worlds, then his words are correct, because the Islamic banks now, which are represented by the Islamic Bank and the National Bank, their operations are more interest-based than ordinary banks. If that is what he said. But if his words are that banks in general, which deal in interest, are being discussed as if this interest is not riba, then that is, of course, not permissible. When I gave the other answer from the second party, that he is now only demanding that the funds be deposited in the state bank, considering that the Central Bank is the state bank and one of the banks, it occurred to me now what I spoke about in the previous session: that this state, even if the tax is a kind of gain, must still be paid because there is an evident benefit for the Muslims. Now, the state, in its capacity of owning this bank...

The Shaykh : Owning what?

The questioner : This bank. And this bank's function is to regulate the other banks. Now, is it permissible to deposit these funds, whether for individuals, if that is allowed, or for institutions, to deposit these funds not for dealing with them but for preserving them?

The Shaykh : Before I tell you whether it is permissible or not permissible, regarding the matter of taxes, we said, as you have preserved from me, that it is because it is imposed on us. But it is not imposed on me to deposit my money in the Central Bank or other banks, whether they are called by Islamic names or otherwise. The matter differs from this perspective, first.

The questioner : This is regarding individuals.

The Shaykh : Second, is there a difference between the Central Bank and any other center when a person, an individual from the Ummah or an official from the officials of the Ummah, deposits some money in a certain bank? Is there a difference between these banks and the Central Bank in terms of whether this money will be used to assist the depositor in riba, or is there no difference? If there is no difference, then there is no difference. And if there is a difference, we need to know it.

The questioner : My master, be calm. In the process of depositing, there is certainly no difference.

The Shaykh : What is it?

The questioner : The state bank does not deal, it does not lend to individuals.

Another questioner : It lends to banks.

Another questioner : It puts...

The questioner : The Central Bank, it is very possible, meaning, considering that it takes these funds, of course, I cannot assert that these funds are allocated, and thus it does not deal with them specifically, especially if it is a deposit.

The Shaykh : The same can be said regarding the other banks.

The questioner : So they are the same?

The Shaykh : Without a doubt, without a doubt.

Another questioner : My Shaykh, it is worse because the Central Bank supports all the banks, but one bank supports itself.

Another questioner : I was present for this topic. The intention was regarding the funds of the orphans. So what is the obstacle for the one who was discussing depositing them in any bank? Why does he not intervene in the Orphans' Institution to deposit them anywhere, while what was proposed was that they be deposited and invested through non-interest-based methods? Why did Hussein Majali insist on mentioning depositing them in a specific bank? What is it that you asked, intending to reach the point I am raising now, why the intervention in the first place?

The questioner : The idea and the viewpoint were as follows: that the guarantee, this is his viewpoint, that the guarantee for these funds is that they be deposited. And I think you heard this talk from Hussein Majali. Hussein Majali says this. The committee's rapporteur, Muhammad Abu Faris, Muhammad Abu Faris and Hussein Majali were not in the picture.

Another questioner : Abu Faris did not... anything.

The questioner : That when the topic was raised and discussed more than once, Muhammad Abu Faris was the committee's rapporteur who was adopting the topic. Hussein Majali was traveling, and then he came. This is what was said. So Hussein Majali, in his capacity as the head of the legal committee, had to adopt the topic that the brothers said. And it was also said that when Hussein Majali said Abu Faris and who else with him, they also praised this matter. And the issue in its entirety is an expression of protection for the funds of the Orphans' Fund, considering that the Central Bank is more of a guarantee and protection for these funds. And it does not mean that depositing the funds in the Central Bank is investing them by the Central Bank.

Another questioner : Especially since... the President, the Orphans' Institution is one of the most successful institutions and it tops... specifically, meaning they did not restrict it. And why is Hussein Majali coming today to restrict it just to introduce depositing it in the banks and make a difference between depositing and investing?

The questioner : This is what I am saying, but there are demands...

Another questioner : ... differed, meaning it took a step of why deposit and invest, and it must be specified that the Orphans' Institution must deposit in a specific place. Why do you oblige them? My brother, consider it as private money, meaning the orphans' money is private money, and therefore do not restrict it. This was how the proposal was.

The questioner : He was afraid that it would not come to the National Assembly to be discussed. Since it is not private money, it came to the National Assembly to be discussed. From there, everyone put their opinion. For example, Ali Fuqair's opinion was that it should be deposited in Islamic banks. This is what I understood, is that not so? And this was also leaked in the discussion; some of it was leaked to the newspapers.

Another questioner : Ali Fuqair, a magazine was published. In the magazine, he issued a fatwa that this statement is sound. But it took another dimension.

The questioner : Now, the core of the question is that whether here or there, we are speaking about it, and we care about reaching the ruling, the ruling of the Shari'ah in this matter. If the Central Bank is like the other banks, like the Islamic bank, then all the discussion originally became nonsense. If the Islamic bank is run on interest-based foundations, it is like the Central Bank. And those who say Ali Fuqair is equal to those who say Hussein Majali, the topic is over. The dimension of avoiding riba is present.

Another questioner : ... nine-tenths or eight-tenths of the Central Bank's transactions are non-interest-based or not similar to riba, and the one-twentieth is suspicious... Will this be better than if you put it, hypothetically, in an Islamic one? Will it be something lighter, something better that you put it in, or is it all the same?The Shaykh : Your question is very clear, but if I told you it is all the same, I would be scientifically wrong. And if I told you as you said it is better, I would have preferred dealing in riba. But I say, the rule, may Allah have mercy on you, some evil is lighter than some. But the result of this answer is that we do not advise a Muslim to place money, whether small or large, in the bank by his own will. The thing I wanted to ask the professor here: these funds of the orphans that are collected, where are they actually deposited?

The questioner : In the Arab Bank, in the Central Bank, and in the Islamic Bank, a very small amount.

The Shaykh : Okay, does the name of deposit actually apply to this deposited money, or is it actually invested in reality?

The questioner : It is invested, moving.
The attendees: ...

The Shaykh : Meaning, no matter how the experts deal with these deposited funds in the banks, does the answer mean that these funds are invested or not?

The questioner : It is invested in a riba-based manner as well.

The Shaykh : No problem, a second inquiry. You know that some banks have what is called a trust fund.

The questioner : This is not acceptable.

Another questioner : This one is completely independent.

The Shaykh : And because it is completely independent, I say, you know this, so what is the difference between depositing funds, whether they are the funds of orphans or the private funds of some rich people, in a trust fund versus depositing them as a deposit in the bank to be invested as all the funds in the bank are invested? What is the difference from both the Shari'ah perspective and the investment perspective? Is there a difference between the two matters or not?

The questioner : The trust fund, as far as ... is concerned, is essentially a safe located in a secure place that you open and close for every financial transaction.

The Shaykh : No problem, I know this. I am asking two questions. What is the difference between the money deposited in the trust fund and the money deposited as a deposit, not in a specific safe?

The questioner : That one is subject to the bank's investment, and this one is not subject to the bank's investment.

The Shaykh : Good, this is what we want to reach. Why do we not strive to purify the orphans' money and cleanse it from the reach of riba? Why is it not placed in a trust fund, especially since this money does not belong to an individual for whom it is practically difficult? And even if we do not consider this a Shari'ah excuse, a large merchant, if he wants to deposit his money in a trust fund, it might be difficult for him to come with his key and the employee's key every time he needs money; it is a tiring process. But the orphans' money means it has to remain preserved until the days when those in charge of these funds decide to distribute it to its rightful recipients, and so on.

The questioner : It may extend to months.

The Shaykh : Yes, this is the best. So why is this money not deposited? Why do those in charge of it, who are responsible for it, as some speakers noted earlier, not strive to preserve the money so that it does not decrease? Likewise, they should strive to preserve this money so that it does not become impure, and this is much more important than the first matter, as he (peace and blessings be upon him) said: meaning what decreased in value, not in material quantity, as some might imagine that I have, for example, one thousand dinars ... for instance, one hundred dinars became nine hundred; it did not decrease. The intended meaning is yes.

The questioner : It may be protected from being destroyed, meaning no wealth decreases by charity.

The Shaykh : This is a passing phrase. I mean, I see it obligatory for everyone who has a connection with this group managing the orphans' funds to advise depositing them in a trust fund, even if they pay a fee from these funds themselves or from the funds of some wealthy donors.

The questioner : Regardless of the ease and precision of the transactions. I mean, I have a hundred employees and I want to pay their salaries; a paper would be very precise and very recorded, unlike if I kept counting, which is prone to error or prone to theft by the employee who wants to take fifteen thousand dinars and skim them.

The Shaykh : What is the connection to the employees?

The questioner : The transactions in the material, the checkbook that the bank gives you, makes it very easy without interest or increase.

The Shaykh : We are talking about the orphans' funds now; what is their connection to the employees?

The questioner : They have employees, they have a large institution, sir, they have buildings and offices and apartments for sale, and they have a very wide scope.

Another questioner : No problem, do not expand on developing the orphans' funds. They announced in the newspaper that they want to deal in the same manner as the Islamic bank regarding murabahah, so they started working with murabahah.

The questioner : Therefore, the idea is that now even Muslims believe that placing these funds in Islamic banks is a purification for them, and we have understood from you for years that the banking methods followed by the Islamic bank are more riba-based than the riba itself in ordinary banks. So this is misleading Muslims; just because it carries the name of Islam, it has become misleading, even regarding the practices of Islam and Muslims.

Another questioner : ... The issue of receiving salaries by checks or collecting them. I have not dealt with murabahah or bidding or anything. I have one thousand dinars and I want to spend them in ten papers of one hundred each. Do I have to bring them and count them dinar by dinar to collect them, or can I write a check for one hundred dinars, one hundred dinars, regardless of the riba-based operations or murabahah, what difference does it make from the Islamic perspective?

The Shaykh: I did not understand what you said?

Another questioner : The bank gives you a checkbook. I can put them in the safe in the box, and they are like someone who put money under a paper, or I can put them in the same bank. The bank deals with a paper for you and against you for one thousand dinars. I can tell them, give them to me in cash, and I can issue a check for one hundred dinars, one hundred dinars, one hundred dinars, ten papers ... it depends on the intention of the matter.

The Shaykh : No, we returned to the previous topic. Brother, we say it is permissible based on the opinion of the permissibility of dealing with these banks. But if the matter is the opposite, as we believe, then what is built upon a defective foundation is defective. So, Glory be to You, O Allah, and praise be to You, I bear witness that there is no deity but You.