Bank accounts deposits, etc. : interest based line of credit

Fatawa Question

[Question one] : Assalaam alaikum Brother Monzer, Please let me know a time when I can talk to you regarding a business we are thinking of doing. The person with whom we are going into a 50 / 50 partnership is alright with paying interest on a line of credit. We do not believe in it and the line of credit is in our name. How can we get around the interest factor ? Can we ask the partner to use the line of credit and just give us a fixed salary ? Basically, we would be asking him for rent for our credit line-if there’s such a thing. Are we responsible that he uses it with interest ? Are there any suggestions you can make ? Once again I am bothering you for your advice. If you feel you can answer by e-mail it is fine because I think I have misplaced your number from 3 years ago. [Question two] : I hope you got my previous e-mail. A new development may have happened and I wanted to ask your advice. As you mentioned in your e-mail we can be employed by such a person who does business and pays interest to do so. The business owner is willing to hire us on a salary but would like to use the line of credit which is under our name. We will have nothing to do with the line of credit and no partnership between us will exist. We will be given a 1099 form as an independent contractor / self-employed to file with the IRS at the end of the year. Is this possible under Shari’ah ? Jazak Allah Khair

Fatwa

Click hereto view more

Publication Date

2008-10-31

Main Subjects

Financial and Accounting Sciences
Religion
Islamic Studies

Topics

• Banks
• Islamic jurisprudence
• Contracts
• Corporations
• Bank deposits
• Bank loans
• Usury
• Partnerships
• Bank accounts

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-730422

• APA
• MLA
• AMA