Loans, Tawarruq, discounting, financing of business : depending on banks in business activities

Fatawa Question

Ask Sheikh, I came across your Fatwas. I have a few questions to ask you regarding my position with Riba based financing. We have a family business which has been around for 30 years or so....In the past around the 70's we did not have any Islamic banks yet. As a result all our activities were conducted with conventional banks. So my question is... Is a Riba based loan contract is the money being loaned classed as Haram money ? Or is it just the money which is out of the Riba itself which is Haram ? Please help me clarify this ? And what would be the position of our business profits ? Secondly, there’s a JV deal to purchase buy and sell land. After profiting from the deal we found out that the deal was not permissible because it had contingent clause that came with the sale ? Is it ok to proceed taking the profit as we only knew at the end of the deal that it was not Halal ? And if not whatever money owed to other stakeholders do we have to pay it out of a new Halal origin or can be distributed from those funds on the deal itself ? Thank you for your help. Wassalam

Fatwa

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Publication Date

2008-10-20

Main Subjects

Economics & Business Administration
Financial and Accounting Sciences
Islamic Studies

Topics

• Banks
• Islamic jurisprudence
• Business
• Bank loans
• Usury

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-729678

• APA
• MLA
• AMA