Bank’s interest is called riba (usury) in sharee’ah
Question Is it true that Islam prohibits financial investment into assets that provide a fixed rate of return? Praise be to Allah. The religion of Islam is the true religion which was brought by the Messenger of Allaah (peace and blessings of Allaah be upon him). It includes the most perfect laws, as Allaah says…
Question
Praise be to Allah.
The religion of Islam is the true religion which was brought
by the Messenger of Allaah (peace and blessings of Allaah be upon him).
It includes the most perfect laws, as Allaah says (interpretation of the
meaning):
“This day, I have perfected your religion for you,
completed My Favour upon you”
[al-Maa’idah 5:3]
The sharee’ah (law) of
the Qur’aan is a perfect, comprehensive and eternal law, containing all the
rulings which bring happiness to people in this life and in the Hereafter.
That includes rulings on matters of finance, the rulings which regulate and
list the means of earning and spending money. It is not permissible to earn
money in every way or to dispose of money in whatever way a person desires.
In all these matters, one has to submit to the laws of Allaah, which include
the prohibition on interest. Allaah says (interpretation of the meaning):
“Allaah has permitted
trading and forbidden Riba” [al-Baqarah 2:275]
“O you who believe! Be
afraid of Allaah and give up what remains (due to you) from Riba” [al-Baqarah
2:278]
Some of the obvious forms
of riba include taking and giving interest on loans. Loans with interest are
not permissible, and what is called interest in the language of the banks is
riba in the language of sharee’ah. The “goodly loan” (al-qard al-hasanah),
on the other hand, is the loan by means of which one intends to show
kindness to another and do him a favour, which does not involve taking
interest. What the banks call loans are in fact contracts of riba. Allaah is
Wise in His rulings because He has prescribed that which is in man’s
interests in this life and in the Hereafter, and He is the All-Wise,
All-Knowing.
