Islamic banking and the banking system in Muslim countries : Saudi Arabia banking, is there usury ?

السؤال

[Question One] Greetings sir how are you. As an ex-pat worker in Saudi Arabia, I am confused over the fact that banks and lending institutions here in the Kingdom offer loans calling them interest-free or Shariah compliant and then charge an interest rate maybe 3.5 to 5 percent to be paid back over 5 years. In addition, some banks have a Shariah- board that approves the banks Islamic Shariah program. I want to know how is this allowed and isn’t this Riba or usury ? Yes I understand that Islam forbids Riba and allows financing and that financing should not be free. Also, I read on your webpage to a response that the banks goal is not to make money off these programs; rather, they are trying to help the society etc… (Sorry for the poor paraphrase but you get my point I hope) But if I want to take a personal loan of 1 million riyals then I should be allowed to pay back only 1 million. Correct ! If I wrong can you please explain this concept to me and why they allow it etc. You can provide attachments in your email and evidences and proofs and also refer me to web links. This whole concept is somewhat confusing especially since I thought the terms of interest rate means Riba and apparently it doesn’t mean that etc. I need a loan for school finance and personal usage. I know of the idea that plp partake in things based on the necessity but this idea of offering interest rates on Shariah complaint services is the norm instead of the exception of the rule. Apparently, the norm is now that Shariah-compliant programs have these personal loans with interest rates regardless of how little interest and when I call some of the banks for clarification I get no response or they can’t explain it other than we have a Fatawa from some Saudi based scholars approving our system. But the consensus is that Riba is Riba. Am I right or wrong ? I know that you have answered hundreds of questions like this and I hope you don’t hesitate to answer it again. I would like to open up this dialogue with you and thanks in advance. Can you please help me to understand this. I just want the truth and facts to allay my confusion over the matter. The aid of course comes from our Lord. Sorry for the long email. [Question Two] Sorry for the confusion. If I take a loan from a bank under a Shariah-compliant program, for example 50,000 SAR and I’m told that there’s an interest rate to repay this back to the bank usually about 4 % with 36 to 60 months to repay isn’t this Riba ? The rate is low but nevertheless it’s an interest rate. Isn’t this Riba ? Yes or no ? Please explain. Last, even if I want to buy a car on leasing or finance, for example a 2008 Toyota Camry for 80,000 SAR I’m told by the sales man that I have to pay 9 % or more interest that includes (6 % interest and 3 % for the insurance). I understand that in financing, a company is allowed to make a profit (but the profit is called interest compounded or combined with profit making programs) is this not Riba ? Can you please help explain this to me and offer me papers to look at via attachments or provide your explanations ? Thank You. I hope this helps

جواب الفتوى

أنقر هنالمشاهدة هذا المحتوى

تاريخ النشر

2007-05-09

التخصصات الرئيسية

العلوم الاقتصادية والمالية وإدارة الأعمال
الدراسات الإسلامية

عدد الصفحات

2

نوع البيانات

فتاوى

لغة النص

الإنجليزية

رقم السجل

BIM-787542

• APA
• MLA
• AMA