-
Interest – Consumable Vs Non-Consumable
Assalam-o-Alaikum,
I heard multiple videos on the issue of Ribba or interest in Islam by respected sir Javed Ahmad Ghamidi sahib, and undoubtedly as usual, his point of view and references are extremely strong in this case.
A question has arisen in my mind related to Interest in Islam:
As Sir Ghamidi says that the money can be called Interest if it’s on Consumable things only, for instance, if someone borrows cash and use it for a particular purpose.
And in case of banks, if a bank charges a specific amout on the profit earned by a borrower of the bank, then it can’t be considered as an Interest until and unless the borrower earns profit. (As I have understood Sir Ghamidi’s point.)
Now the question is if someone borrows cash from a person (a friend or relative etc.), he doesn’t consume the cash at once but he, for suppose, buys a real estate property, would the extra amount of money on the original amount be still considered as INETEREST or RIBBA?
Thank you.
Basheer Ahmed, Karachi, Pakistan.
-
6 Replies
-
Interest – Consumable Vs Non-Consumable
updated 2 weeks, 4 days ago
3 Members
·
6
Replies
-
Buying a piece of land is consumption of the money borrowed. Consumption means it loses itself for something else. So any additional amount on the loan will be Riba.
-
Thank you so much for the response @Irfan76 . From your response, another question has arisen in my mind. That is, if buying a land or property is consumption of the money, then in case of banks offering loans for businesses and charging them with a particular amount on their profit, the money borrowed is consumed. In both of the cases the money is invested. i-e buying a land or property from the borrowed money lent by an individual and making some profit after selling it; on the other hand, businesses do the same when they borrow money from banks.
Then what difference lies between these two cases? Could you kindly clarify it, please.
Thank you.
-
-
Also @Irfan76
If purchasing land is considered a form of monetary consumption (especially when you need to put down 20% for a house), then how can a mortgage be deemed halal by Ghamid Sahib?
-
It is the nature of transaction which determine it is loan or investment. In personal loan the lender doesn’t not bother where the money will be used. In the investment, the money is given for a particular purpose, considering that it would generate profit. These are two different things.
Mortgage is not investment. It is selling and purchasing. The bank purchases car or r house and sell it to you with some additional amount for facilitating you to pay it later.
-
Respected @Irfan76 , thank you brother. The logic is 99% clear to me. But I have a last question in this regard, I would really be grateful and appreciate if you could clarify it. That’s, the point you highlighted here that lender undoubtedly doesn’t have any idea where the money borrowed is going to be used. BUT, Allah knows everything. I mean the intention of borrower. So, will the lender still be guilty of that? Will it be counted as SIN of taking Interest? Whereas the borrower is earning profit on the money borrowed. Here the nature of utilising the money is the same as a person borrows money from a bank and utilises it as an INVESTMENT.
Isn’t it??
Jazak’Allah.
-
-
If the lender intends to give the money as a loan and demand addition, it is Riba, if he gives as an investment, and earns profit, it is halal. The lender is not responsible for the intension of the receiver.
Sponsor Ask Ghamidi
