Q. 1. What is the exact meaning of usury which is forbidden in Islam? The Qur’an speaks of usury being devoured “manifolds.” Does this mean that bank interest, which is often a small percentage, does not fall under this prohibition? What if a person needs to keep money in the bank for safe keeping, particularly if the security situation in the area makes it risky to keep money at home or workplace? The bank will invest the money. Is it allowed to have a share of the returns?
Q. 2. What is the Islamic view concerning government bond certificates, and national savings certificates? There are sometimes strong incentives for people to buy these as forms of savings, as they generate profit. Yet it is difficult to see where the profit comes from, considering that the money is used by the government to finance its development projects.
Q. 3. Some charitable organizations conduct lotteries to finance their projects, such as the building of hospitals or offering free medical treatment or research in a medical or social problem. People buy such lottery tickets as a way to help such charities. But they also would love to win the lottery. Is this permissible?
M. Sultana, Abha
A. Usury is the situation where one person borrows money from another for a certain time, then when the time of repayment arrives and the borrower does not have the money to settle, the lender gives him more time in return for an increase in the amount to be repaid. The word, riba, which is the Arabic for usury, originally means “increase” and it has come to signify this sort of increase. The form of riba which was practiced in pre-Islamic days is the one which I have just mentioned. Islam forbids such a transaction regardless of the amount of increase required for the delay in payment. It is not only when the increase is “manifold” that the transaction is forbidden. The verses which speak of the complete prohibition of usury, 2:275-280 do not specify a rate of increase, which means that no matter how small the increase is, it is forbidden. These verses were revealed later than the one to which the reader refers.
Now interest paid by the bank is similar in certain ways to the increase of the amount one party has to pay to another. Yet there are differences which make it necessary that the two transactions be considered separately. Many scholars relate the two and treat them as usury. However, some scholars have come up with different opinions, but these cannot make the distinction so categorical as to create a general conviction that the same ruling does not apply to them. Hence, even when some scholars look at interest in a different light, they still find some banking transactions usurious.
It is understandable that people need to use bank services. What makes a certain transaction lawful is its form which takes it away from being a loan generating benefit to the lender at the expense of the borrower. Thus, if you go to a bank and seek to invest your money expecting some returns, you make the bank your agent and you get a percentage of the profits. In this way the transaction becomes permissible, because in the case of investment, you should be liable to bear a share of the loss in the unlikely event of the bank making a loss.
A.2. National savings certificates are one way by which a government borrows money from the people to finance its projects and services. If the government tries to carry out its project without generating funds in this way, it has to borrow from some other source and the cost would be much higher. Thus the profit it gives may not be an actual profit like that generated by trade, but it is ultimate profit which is also very real, although it may take long to realize. The incentives given may be very tempting, but ultimately the government benefits a great deal by offering such saving certificates. Here the case is one of a loan generating benefit to both sides. Some scholars have returned a verdict of prohibition on such certificates, while others have made them permissible. It is not possible to give a clear verdict without knowing more about them.
Another method a government may use is to offer bonds and to run a lottery giving prizes to the numbers drawn. It is very hard to see how this can be permissible. It is true that the buyer of a bond certificate will get his money back, as he does not buy a lottery ticket by it, but the prizes offered are the incentive many people buy these bonds for. These prizes are available only as a result of the money people give to buy these bonds. Hence, they are given to some participants and not to others. That is unfair, and whatever is unfair cannot be acceptable from the Islamic point of view.
A. 3. Lottery is forbidden even when its purpose is to finance charitable services. People buy lottery tickets not to support the cause, but to win the prize. These prizes are only a small percentage of what the people pay. There is no justification for anyone to get a large sum of money simply because he bought a ticket carrying a particular number which comes out in the draw.
Accident on the road to pilgrimage
Q. Two years ago, I intended to offer the pilgrimage on behalf of my deceased mother, having offered my own pilgrimage earlier. We started with several cars from Dammam, and I declared my intention to do the pilgrimage as I left home. When we were half way on our journey, our car was involved in a serious accident that left one passenger dead and all others injured. I was transferred to a hospital in Alkhobar where I stayed for 10 days. Needless to say, I missed the pilgrimage then. I did not manage it this year either. What is my position?
A.S. Trowbridge (Mrs.), Dammam
A. Obviously the accident took place a long way before reaching the meeqat. As such I take it the lady was not yet in consecration, or ihraam. Hence, nothing is required. It is like anyone who intends to go for pilgrimage but before he starts, he is prevented from fulfilling his intention. He has not started the pilgrimage. Therefore, nothing is needed. What worries me in the question, however, is the lady’s saying that she declared her intention to do the pilgrimage before she left home.
Does this mean that she actually entered into consecration, or ihraam, before leaving home? In order to make this clear I ask, had she had a man companion doing the same as she did, would he have put on his ihraam garments at the time and said something like: “I intend to do the pilgrimage, my Lord, so facilitate it for me and accept it from me.” If the answer is yes, then she would have started her pilgrimage already and she was in ihraam.
In this case, she would have needed to slaughter a sheep and have it sent to the Haram area where it should be distributed to the poor there and then she would be released from ihraam. But if she only meant that her trip was intended for pilgrimage and that she would enter into ihraam or consecration at the point of meeqat, then nothing is required.
What remains is that since she wanted to do the pilgrimage on behalf of her late mother, she should do so as soon as circumstances allow in order to gain a great reward both for her and for her mother.
Sending zakah back home
Q. Is it permissible for me to send my zakah back home to a relative who will see to it that it goes to our poor relatives and neighbors? Can this relative decide to whom to pay it? Can he or she pay such zakah for the marriage of girls in the family living in poverty? Is it possible to pay zakah during the year and adjust against actual liability at the end of the year?
G.M., Jeddah
A. It is always better to spend zakah in the community where one lives, so that the community will benefit by the prosperity of its members. However, where communities are generally well off, and a person comes from a much poorer community, then it is permissible to send one’s zakah and other donations back home to alleviate the poverty of his immediate relatives and neighbors. It has to be borne in mind that zakah may not be paid to relatives whom one is duty bound to support. Thus, it may not be paid to parents and offspring. Only relatives who are not among one’s dependents may benefit by one’s zakah. These may be given zakah money to supplement their income in order to have a decent standard of living. They may be helped to complete their studies, or to get married, or to have jobs of their own, or to buy the tools of their trades and jobs, etc.
It is also perfectly permissible to pay zakah in advance, but one must always calculate one’s zakah liability on the due date and adjust it against what one has already paid out. Thus, if you have your zakah date in Ramadan and pay 30 or 40 percent of your likely zakah liability before Ramadan, you have to make your calculations in Ramadan. When you have determined the amount of what you have to pay in zakah, you deduct what you have paid already and pay out the remainder.
