Banking

[Decadent Ambition]

Hello all,

Is it Haram to work in an investment bank.A mad mullah friend of mine & I had a heated discussion the other about working in western bank.Apparenly Its outright HARAM.

Secondly, how do Islamic banks operate.It would be interesting to see how they manage to stay afloat without interest.

thanks

[Qac Qaac]

I don't know.. ask the qualified ppl.

[Thinkerman]

^^ Duh lol :rolleyes:

 

Check this link out bro:

 

Institute of Islamic Banking and Insurance

[mojam]

I don't know either. The idea, however is the interest. Banks make money through interest.

[Taqwa]

Salaamu Alaikum Brother Li Ka-shing,

 

It is Haram to work for any bank that deals with Riba Akhi. Wallahi the money is nice, I do agree. First thing out of school I wanted to do was work for a Bank lakiin look at the beauty of Islam. When you give up something you want to do for Allahs sake, you will get it back in some other form (Of course better). Insha'allah if I find my old notes on Islamic banking I will send it to ur private. It is only 7 stage's (Laws of Islamic Banking). If you live in the UK, the Islamic Bank of Britian is soon to open, why don't you give it a try. I'm not a resident of UK but go to google, type "Islamic Bank". Insha'allah I hope I've helped.

[Sensual_Healing]

As-salaam alaykum wr wb

InshaALLAH this should answer ur question akhi....

 

 

The Fiqh of Working for a Bank

Answered by Mufti Muhammad ibn Adam, Darul Iftaa (Leicester, UK)

 

 

I am currently working for a bank, and I know at a basic level that you're not allowed to work in bank due to Interest. This is not an Islamic bank.All that I am doing is checking if the customer has filled in the form right and sending a letter back to the customer, letting them know what is happening about the bank account. I don't deal with the money or the financial aspect of this . Also is it allowed for a cleaner or someone concerning the food aspects to work at a bank? I was wondering what is the Islamic rule or law concerning someone working at a bank, and is it right for me to still work for them?.

 

 

In the name of Allah, Most Compassionate, Most Merciful,

 

As a principle, it should be remembered that, the permissibility or impermissibility of employment in a particular firm or company basically depends on two things:

 

1)The nature of the job must be lawful (halal), meaning if the work entails something that is prohibited in Shariah, such as posing for nude picture-taking, serving alcohol or recording and calculating interest transactions, etc, then this type of work will be unlawful.

 

The reason for its prohibition is that, the work itself has been prohibited in Shariah. And due to this, even if the salary was paid from a Halal source, the work will still remain unlawful.

 

2)The salary or income that one receives must also be from a Halal source. If the work itself is lawful (halal), but the salary is paid from unlawful and impure money, such as stolen or interest money, it will still be unlawful to accept that job.

 

Keeping the above two points in mind, the ruling with regards to working in a bank depends on exactly what the job consists of.

 

Employment at a bank that entails direct involvement with interest based transactions, such as the job of a manager, cashier, clerk, etc will be unlawful (haram).

 

Sayyiduna Abd Allah ibn Mas’ud (Allah be pleased with him) narrates that the Messenger of Allah (Allah bless him and give him peace) cursed the one who accepted usury, the one who paid it, the witness to it, and the one who recorded it. (Sunan Abu Dawud: Book 22, Number 3327).

 

In another Hadith, the Messenger of Allah (Allah bless him & give him peace) invoked curse (la’na) on the receiver of interest, the payer of interest, the scribe and the two witnesses. And he said: “They are the same†(i.e. in sin, m). (Sahih Muslim)

 

Thus, the warning of the Messenger of Allah is very severe. The one who is directly involved with interest transactions in any way, shape or form, such as writing or calculating the transaction will earn the curse of Allah Almighty and his beloved Messenger (Allah bless him & give him peace).

 

Therefore, one must avoid accepting a job at a bank, which consists of being involved in interest transactions and dealings. It is unlawful (haram) to help and assist others in their interest-based dealings. One must decide between temporary worldly gains and the curse (la’na) of Allah Almighty and his Messenger (Allah bless him & give him peace).

 

If a person is already employed at a bank, then he is advised by the scholars not to leave his job immediately, rather he should look for a permissible job elsewhere and when he succeeds in obtaining one, he should leave the employment at the bank.

 

The important point here is that one must exert all possible ways and means in order to a find an alternative job. If one puts in the effort and is willingly ready to accept comparatively reduced benefits, then there is no reason why a suitable job is not found. (See: Contemporary Fatawa by Shaykh Taqi Usmani, P. 280-281).

 

However, if the employment at a bank is such that it does not have a direct involvement whatsoever with interest based transactions, such as the job of being a guard, cleaner or cook, etc, then this type of job will be lawful although superior to avoid.

 

As for the income received on such jobs is concerned, scholars mention that the money stored in a bank is not all interest money, rather the cash stored in the bank (and from which the salary is given), comprises of the depositors depositing their money in various accounts, capital put in by the owners of the bank and also interest money. In fact, the portion of interest money is usually less in comparison to the other two types of income.

 

Therefore, the salary received from the bank is a mixture of unlawful and lawful wealth of which the majority is lawful. As such, it would be permissible to accept this money as income provided the actual job is lawful. (See: al-Fatawa al-Hindiyya: 5/343).

 

In conclusion, it will be unlawful to employ one’s self in jobs at a bank (or any other place) that have a direct involvement with interest-based transactions. However, if the job has no connection with interest dealings whatsoever, then it would be permitted to take this job, although detested.

 

And Allah knows best

 

Muhammad ibn Adam al-Kawthari

Darul Iftaa, Leicester, UK

www.daruliftaa.org

[OG_Girl]

Secondly, how do Islamic banks operate.It would be interesting to see how they manage to stay afloat without interest.

.

 

Well, we say here " ask experienced..."...lol

 

I tell you my expericence with "Islamic Bank"... My dad wanted to buy a car for me ofcourse my dad wasn't ready to pay cash .If you go the dealer will ask you lease but with intrest.. So the dealer said you can lease throught That Islamic Bank.

 

We sit with the guy who is responsible in Islamic Bank.. he said every thing is ok we will lease for you without intrest... here the shock he said :

 

The car from the Company is $ 31 000 he said we will buy the car cash from the Dealer, so car will be ours (just by name) the same moment You and I(the bank) will do another contract.. so I will sell for you $38 000.. and you pay for us now that extra $7000 then we lease for you the reast -real price -of the car which is $31 000 :eek: :eek:

 

I was like what is different between you and other banks? isn't this playing around the system? you just not naming "intrest" but you take extra money what ever you call " fa'edah or riba, or be'ah"!!!! he Quoted the Aayah..." Aha-lah Allaho al bey'ah wa harama riba"!!... I just couln't believe, any ways I did not have choice cause money wasn't mine my dad paid but still I believe was unfair.

 

Salam

[NGONGE]

^^^^ His profit from selling you the car was fixed. He will not ask you to pay any other extra amounts nor is the amount of £38,000 variable. The difference with interest is that it varies. Say I’ve lent you £100 today and asked you to pay me £500 back next week. The time for payment came and you couldn’t pay that £500. I gave you a longer period to pay me the money but this time I decided to add another £100 to the money you owed me (inconvenience money).

Excuse the very simplistic definition of both here.

[OG_Girl]

Well, you right they wont ask me extra cause he did not wait ..he got his " intrest" right away and leased the car for me. Doesn't mean if I couldn't pay he will be nice to me and wait ...Naaah he will take the car from my house and sue me dear!!

 

These people playing on system they both care their business only.

[NGONGE]

^^^^ When they sue you, are they going to sue you for more than the total amount of the car?

[OG_Girl]

Yes, I have to pay extra but still they don't call "riba".. they call fine or punishment for breaking the contract .

 

Man eitherway they are only benifit from Islamic Banking the costumers like me and you still pay extra what ever you name it.. does that matter to you?? :confused:

 

Salam

[NGONGE]

No, not at all. I was telling you the difference between the two because you asked. I’m not sure how your bank works. But what I’ve posted above is my understanding of how Islamic Banks work. Would be a real shame if all Islamic Banks worked in the way you describe them though. Where would we put our money? Und the mattress?

[OG_Girl]

I don't know about others but the one I had experience with ..have Fatwa from .." mo2tamer al Islamy" and got all these fancy names singnatures ...I trust them but just I feel I have to pay extra and they don't care about broke muslims like moi

 

By theway there is no problem to put your money there ...they wont give you any extra money unless you sign contract to invest your money with them and share when they loose or gain.

 

Salam

[QUANTUM LEAP]

The contractum trinius was a legal trick used by European merchants in the Middle Ages to allow borrowing at usury, something that the Church fiercely opposed. It was a combination of three separate contracts, each of which was deemed permissible by the Church, but which together yielded a fixed rate of return from the outset. For example, Person A might invest £100 in Person B for one year. A would then sell back to B the right to any profit over and above say £30, for a fee of £15 to be paid by B. Finally, A would insure himself against any loss of wealth by means of a third contract agreed with B at a cost to A of £5. The result of these three simultaneously agreed contracts was an interest payment of £10 on a loan of £100 made by A to B.

 

I had read about the contractum trinius some months before first encountering the full documentation behind an Islamic banking murabahah contract. It was the kind of contract that Person A might use in order to finance the purchase of good X from Person B. The bank would intermediate in the transaction by asking A to promise to buy good X from the bank in the event that the bank bought good X from B. With the promise made, the bank knows that if it buys good X from B it can then sell it on to A immediately. The bank would agree that A could pay for good X three months after the bank had delivered it. In return, A would agree to pay the bank a few percent more for good X than the bank had paid to B. The net effect is a fixed rate of financial return for the bank, contractually enforceable from the moment that the bank buys good X from B. Money now for more money later, with good X in between.

 

The above set of legal devices is nothing other than a trick to circumvent riba, a modern day Islamic contractum trinius. The fact that the text of these contracts is so difficult to come by is one shameful fact of Islamic banking. If so clean, why so secretive? The following is an excerpt from a murabahah contract that was used frequently by two major institutions during the 1990's. The 'Beneficiary' is the client that needs finance, and earlier clauses require that the Beneficiary acts as the agent of the Bank in taking delivery of the goods.

[Legend of Zu]

Originally posted by QUANTUM LEAP:

The contractum trinius was a legal trick used by European merchants in the Middle Ages to allow borrowing at usury, something that the Church fiercely opposed. It was a combination of three separate contracts, each of which was deemed permissible by the Church, but which together yielded a fixed rate of return from the outset. For example, Person A might invest £100 in Person B for one year. A would then sell back to B the right to any profit over and above say £30, for a fee of £15 to be paid by B. Finally, A would insure himself against any loss of wealth by means of a third contract agreed with B at a cost to A of £5. The result of these three simultaneously agreed contracts was an interest payment of £10 on a loan of £100 made by A to B.

Everyone is missin the point...

The Islamic banker is buyin the product from the Seller..and then Sellin it to you at a higher price... So Two Transactions have happened here

Between The Seller -- and the Bank - - - and between you and the Bank... and that is why it is bay3..and not riba..while in the Riba..the Bank makes the money from the Money lent to you and not from the product....

 

there is a fine line between the riba and bay3..and one should be carefull...