The Creed of Compassion-Islamic Teachings & Answering Doctrinal Misconceptions

Issue No. 2422- What people get from banks as loan etc. and repay an additional amount to them will be halal if the transaction has taken place in an Islamic way and if it is not based on interest.

Issue No. 2424- There is no harm in receiving interest from foreign and non-Muslim banks. However, it is haraam to get it from Muslim Banks.

Issue No. 2429- The promissory note or bill of exchange, which is current among the businessmen, is not real money and does not carry any value by itself, but it is used as a sort of evidence of loan. Hence, a transaction does not take place with it, and it is of two kinds: 1- The real promissory note that a debtor gives to the creditor against his debt. 2. The friendly promissory note that a person gives to another person, without having any debts against it, and he means that the second person can give the promissory note to a third person and after deducting some, he can get the rest as cash. Also, a cheque is of two kinds like a promissory note: 1- Real cheque which can be cashed within a period of time and it is used in exchange for a commodity. However, a cheque which is payable at maturity time can be sold back to the debtor or to a third person for a lesser price. 2 – Friendly cheque which is not in exchange for a debt, in which case, there is harm in selling it.

Issue No. 2430- If a person exchanges “the real promissory note” for an amount less than that, for example, a $100.00 promissory note which is for a period of three months, he exchanges it for $90.00 cash, in other words, if a creditor sells a $100.00 note, which he has to realize from the debtor, for $90.00 in cash, there is no harm in this sort of transaction of promissory note and it is termed as ‘discount of the promissory note’. However, transaction on the friendly promissory note is not free of problem (harm), because no real debt is involved in it, and none of the ways suggested to solve this problem are free of problems.

Issue No. 2431- One can refer to the person whose signature is on the promissory note. That is, if the promissory note giver does not repay his debts in due time, the creditor has the right to demand his dues from those whose signature appears on the promissory note. In fact, those who have signed the promissory note are the guarantors of the debtor. That is, if the debtor fails to repay his debt, the guarantors are under the obligation to pay it. (This sort of surety is technically termed as “addition of an obligation to another”, and as it was said in the rules regarding surety (Zamanat), it is in order.)

Issue No. 2432- It is permissible to have foreign currency exchange transactions, i.e. one can exchange English pounds for American dollars, or French franc for German mark, etc., and there is no harm if it is less or more. However, if a person lends some money to another person whether it is in dollars or other currencies, he can ask him for the repayment of the same, and if he asks for more than that amount, it will be usury and haraam. And if someone lends a person some foreign currency, for example, some 100.00 German marks, and if he is forced to receive the money, for example, in Canadian dollars, then it should be calculated at the common and usual rate of the market. However, if the creditor himself consents to receiving less than that, there would be no problem.

Issue No. 2433- Key money is the right of priority that a tenant gets on the property against the money that he pays to the landlord at the beginning. As per this transaction, the tenant who has paid key money in renting that property has the priority over others. Key money did not exist in the past but nowadays it is a common practice and it is in order under the following circumstances: The amount of key money should be known and the parties involved should perform the transaction on their own volition and accord. They should be adult, sane and mature, and they should know the meaning of key money and its necessities.

Issue No. 2434- The landlord can lease his property to a person and in addition to the rent, he can take key money from him. In this case, he cannot lease the rented property to someone else, even though the period of the lease may have expired. However, if the first tenant who has paid key money agrees, the landlord can lease it to someone else. However, the first tenant has the right to transfer the key money of that property to someone else, and he may charge from the person to whom he hands it over, key money equal to or more or less than that which he has paid himself.

Issue No. 2435- If the period of the lease of a property on which key money has been paid expires, the landlord is bound to lease it out to the same tenant or to anyone that the first tenant agrees, and the rent should be fixed fairly as per the view of a trustworthy expert.

Issue No. 2438- When it is agreed upon between government or an insurance company on the one hand and a policy holder on the other that the policy holder will pay a specific amount every month or every year and, in case he sustains loss, government or the Insurance company shall compensate him for it, such a transaction is called 'insurance'. And this is an independent transaction and contract which is valid, if specific conditions, that will be explained later, are fulfilled. It does not make any difference whether it is a life insurance of an insurance which includes commercial goods or buildings, cars, ships, aeroplanes, or employees and labourers and the likes.

Issue No. 2439- The parties to the insurance contract should be adult and sane, and the insurance contract should be made volitionally and with their free will, and none of them should be feeble-minded. In addition, they should specify all the particulars and details of the insurance contract including the following:1- The thing insured viz. vehicle or building or person.2- The parties to the insurance contract should be known.3- Instalments payable by the policy holder.4- The period of insurance including the date and year should be fixed.5- It should be stated for what kind of loss the Insurance company will be under obligation to compensate e.g. fire, bombing, sinking, theft, death or disease etc.6- The value of the insured object should be determined, for example, a particular house is insured for the amount of £20000.00 or more or less. However, the fair value of the day and all the general principles that are common and current should be taken into consideration and be observed.

Issue No. 2440- The formula for the agreement of insurance can be pronounced in any language, or the agreement can be written down and signed.