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Dealing in interest with the unbelievers

Published: 24/08/2011 10:42:00 AM GMT
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Some scholars have recently argued that interest from non-Muslim banks and financial institutions is permissible for Muslims but said that the same is impermissible if those businesses are in the hands of Muslims. They argued that since Islamic Law is not applicable to non-Muslims, Muslims are allowed to do business with them in the existing business parameters that the unbelievers have established for themselves.


Answered by

Sheikh Mustafâ Makhdûm

The majority of the scholars including Abû Yûsuf, the prominent Hanafî scholar, decreed that it is totally unlawful to deal in usury, even with unbelievers. The reasons for this are as follows:

A. The textual evidence related to the prohibition of interest are general and do not distinguish between Muslims and non-Muslims.

Allah says: “And forbidden is usury”, and says: “O ye who believe, fear Allah, and give up what remains of your demand for usury, if ye are indeed believers”.

The Prophet (peace be upon him) said: “Allah curses who requests usury and who gives him usury, the one who writes down the usury transaction and its two witnesses.” [Sahîh Muslim].

It is an established principle of Islamic Law that general rulings may not be particularized without specific evidence. In this case, there is no specific evidence exempting our transactions with unbelievers from the general prohibition against interest.

It is also a principle that general evidence is general in every detail. Therefore, the meaning of the above verse is that usury is unlawful at every time, in every place, with everyone, regardless of the circumstances.

B. Allah has forbidden things due to the harm that they cause.

In this case, the harm is oppression and taking people’s money unjustly. This harm is equally present with non-Muslims as it is with Muslims.

Muslims are required to be just even with the unbelievers. Allah says: “And let not the hatred of others to you make you swerve to wrong and depart from justice, be just: that is next to piety.” [Sûrah al-Mâ’idah: 8]

Basically, forbidden acts are absolutely forbidden. The same can be said of gambling and adultery. If we legalize usury with the unbelievers in their countries, it follows that we should legalize all other forbidden things such as gambling and adultery. That would be obvious nonsense.

Source: Islam Today




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