Saturday | 07 December 2019 | 10 Rabiul-Thani 1441
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Fatwa Answer

Question ID: 764 Category: Business Dealings
Islamic Loan Financing

Assalam o Alikum,

 
Respected Mufti Nawal ur Rahman Sahab,
 
I need your help in a situation. I bought home with Devon bank financing six month ago. Before buying I did my research to see if there is any intetest ("Riba") involved, to me it seemed okay at that time so I bought. This is the only home I have to live with my family in US.
 
Do not know why Sometimes my heart says may be I am not doing right. May be I am involved in intetest, my bank is just sugar quoting terms and in the backend everything is same as conventional banks. My bank is taking money from same source as other banks do. Is it really a fundamental difference or just change of terms.
 
I feel I am in middle of a fight between my heart and mind. Mind has justifications but heart doesn't, still heart overcoming mind sometimes. I never want to go near hell fire, want to avoid any possible thing that can take me near Allah's defined limits. I don't want to get involved in something that my Creator doesn't like. 
 
I pray to Allah to show us the right path and request you to help me please.
 
My contact phone number is here below.
 
Jizak Allah

الجواب وبالله التوفيق

The requirements which have been specified in the light of the Shar‘ai teachings and have been rendered mandatory, the guidance which has been given and the advice provided regarding the correctness of this procedure (i.e.in regards to financing houses through murabahah)by the respected ulamah kiram of Shariah Board of America to Devon bank, if all of those conditions are implemented with complete and necessary details, then from a Shar‘ai standpoint this method will be considered correct. There is no inclusion of riba in it nor is anyone involved in interest.

The procedure of Islamic financing through Islamic murabahah compared to the banks following the classic capitalism at their core have fundamental differences and based on these fundamental differences one is considered halal whereas the other haram, one is rendered permissible where as other impermissible.

It is evident from your question that you have ishkal(difficulty) regarding your loan transaction with the bank i.e. whether the loan taken or the transaction performed with the bank in a halal manner is involved in a mix of interest and non-interest based business.

There is no doubt regarding the fact that banks are in general involved in interest based transactions, however, just this fact does not render performing loan transitions with them, as impermissible. This is because in the light of fatawah keeping relations and dealings with individuals who have a mixed income (i.e. from both halal and haram sources) is permissible in the case when the majority of their income is from halal sources. The general deposits stored at the banks have a major share which is from halal sources where haram compared to the halal amounts is usually lesser. This is because the moneys deposited in the banks are of different categories:

  1. Moneys from people deposited as amanat
  2. The initial investment money deposited by the bank
  3. The profits fromhalalsources accrued by the bank
  4. Interest accrued through the loans given to people
  5. Loans taken from other banks
  6. Income through haram business or transactions

From the above areas, only 4 and 6 pertain to sources which are considered haram and impermissible for use in the light of the exalted Islamic Shari‘ah. The remaining sources cannot be considered as absolute haram. Instead, the more probable view is that moneys deposited through the other sources is halal. When their major share has been established as halal, then in the light of the Shar‘ai ruling, there is no two ways in the gunjaish(i.e. provision of permissibility) to perform transaction with them. However, if someone has taken the commendable step of leaping forward and following the path of taqwa then that individual is definitely worthy of praise and appreciation. Such and individual will receive the reward for refraining from mushtabihat however in the light of taqwa and wara‘ the fatwa will not be changed.

واللہ اعلم بالصواب