Loans & Debts Rules and Etiquette #02
Channel: Hacene Chebbani
Episode Transcript ©
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hamdu Lillahi Rabbil alameen wa salatu salam ala Shifu. Since you know, Mohammed, while he was suffering, he is the main part of our program debts and loans, rules and etiquettes. So basically, there is some, there are some basic principles that we need to know about loans.
And the basic principle in Islam that loans are strictly benevolent. So it's a virtuous act that doesn't provide for any compensation for the lender.
And this principle, their owner, when they talk about it, they mentioned a statement, it's a very famous statement called local then your run a fan for whoever cool local, then you run a fan for whoever basically it means any loan that generates benefits for the lender, or that exclusively generate
generates benefits for the lender is considered a form of Riba. So this is a basic principle in Islamic Sharia. So basically, the lender is not supposed to get any extra money for his loan from the borrower, this is number one, and number two is not supposed to get any favor or gift from the borrower.
This is the conclusion. Now, there are two exceptions for this rule. There are two exceptions. The first exception, the borrower is allowed to give extra money or a gift to the lender at the time of repaying the debt.
Now during the period of the loan, no other time of repaying him without any pre agreement without any stipulation. Why? Because it also seldom said in a famous Hadith, he said in the era nursey sanghoon. Kava. He said, verily, the best among people, the best among people are those who repay their debts handsomely. And this hadith in Sahih, Muslim, and he made this statement, because the Sahabi gave someone something better he and he borrowed someone, something from someone else at the time of repaying him. He didn't find something equivalent, so he paid him back with something better. And also last SLM, said, this is not Reba, actually, this is something good. And then he
made this statement at the end in the era nursey sN home cover and verily the best among people are those who repay their debts handsomely.
Number two, the second exception, if both parties had the habit of exchanging gifts, their family members, their friends, close friends, for example.
If they have the habit of exchanging favors or gifts, then it is permissible for the board to give a gift to the lender during the period of the loan, because there is no shobhaa here, it's not a compensation for the loan, because they had the habit of exchanging those gifts or favors before before the made the transaction. So this is the second exception. Now there is a question some people might say that this principle called local Avenger run a fan for horiba came in a week Hadeeth
there are people who are say this that came it was narrated in a weak Hadith. And the answer yes, it is it was narrated in a week had a week Hadeeth had a wife, but their own Emma have agreed, agreed that its meaning is true.
Based on other proofs, based on other proofs, the believed and there is a schema, a scholarly consensus that the meaning of this hadith or this basic principle is true. But then Allah, Allah said in Surah Al Baqarah, were in Tibetan, Fela congroo also unwelcome lack of the moon our moon, when talking about Riba if you go to the page, one page, actually the eight, from 275 to 281. The whole page is talking about the dangers of Riba within this page, Allah Subhana Allah said but if you repent, then for you is your capital for you is your capital that means you don't do something you don't take something extra above your capital, the capital of the debt or the or the or the
capital of the loan. analyst patella said do not wrong and you will not be wrong a lot of Lee Muna well at with llamo so this is from the Quran from another Hadeeth. As soon as I say Lem said and this is
Imagine advising people who take loans or deal with debt. He said if one of you takes a loan from someone,
and the last the end he gives him, the borrower gives him a gift, or a favor, or a ride offers a right Subhanallah look at the statement of Rasul Allah. So, he offers him a ride on his riding beast, he should not accept the gift or the ride.
This is a heavy formula. So Lola is a little low on himself, unless they used to
treat each other in that manner beforehand. Before the no the deal, they made this transaction, they used to actually give favors to each other, they used to help each other they used to give gift to give to each other than it's okay. And I can I can testify to that he and his panela.
Now, one time I remember I had a personal experience, I gave a loan to someone within few days, three days, he called me and he wanted to give me a favor.
And I never received this favor from him.
So halala immediately I thought about, about what Rasulullah sallallahu alayhi wa sallam said, so it could happen that someone feels like he wants to give you something for as a compensation for your loan. So even mineral coudl said, it is a strictly benevolent, the lender is not supposed to benefit from his loan. Now loans in modern economy, there are many loans that we deal with them, sometimes we don't recognize them as loans, for example, and this is basic, basic knowledge bonds, send a debt, someone asked me send me an email. And I'm not sure if he meant these bonds in the market in the stock market or he meant bonds that are related that are bought through our ESP and RSP all
mentioned them Mashallah, if, if this is what he meant, but I promise last halaqa to answer your questions. So we'll start with bonds here. But then there are two ways for firms or or corporations or government to rise raise funds in the in the financial market by issuing debt instruments and they are called bonds or were issuing
by dealing with equity securities with they are called stocks. Now, this debt instrument represent a contractual agreement between the borrower who is obliged to pay the holder of the instrument, certain fixed amount of money on particular intervals, and every three months every six months, it depends on the agreement, it depends on the ball. And this is a pure interest. So, bonds in the stock market and not halaal It's a loan that generates interest and upon maturity at the time of maturity, the borrower will will pay the principal amount to the to the investors. Number two bank deposits, there are some Muslims who don't know the classification or the definition of bank
deposits in the Islamic Sharia.
And here the our roadmap in the International Islamic finance Academy, there is a ship Ishmael, Yanni there is almost a scholarly consensus between Muslim scholars in modern times that bank deposits are a form or a form of loan. It's a loan. The bank doesn't need your loan, but it is a loan because if it was a word here your intention is to deposit money for safekeeping, right.
This is our intention. But in theory, I want to give something to someone for safekeeping he's not supposed to use it
and he doesn't guarantee your your Amana your money or any other item that you keep it with him he doesn't guarantee it unless there is a proof that proof of negligence that he was negligent that he didn't do the due, you know diligence to protect your manner or your money or whatever you gave him for safekeeping right. So here we do it with this intention, we deposit this money to protect it to save it in the bank for protection because you cannot save keep your money at home. But here the bank does not. The bank deals with it. The actually they do business with your money. It's called financial intermediation. So here this International Islamic finance Academy. It's a very
The famous very renowned organization
has made a decision in April 1995. They said, these deposits are loans from a faculty perspective.
These deposits are loans from Sharia perspective. And any interest that is earned through this bank accounts is a form of freedom. Now, what else is forbidden from the benefits received by bank customers, we receive gifts sometimes, right? They tell you open an account, deposit some money in it and you get an iPad or you get a gift from the bank. Now, there are two types of gifts or gifts here one gifts that are exclusively given to some customers for a pay if opening an account and depositing a certain amount of money, then these gifts are not permissible. It's a form of labor. Because they are giving you this gift for opening this account and giving them this loan, it's a
bank deposit, but it is alone. So this gifts are exclusively given to those account holders. Now the gifts that are given to all customers like pants, like notepads, all customers, regardless what you do with them, what kind of transaction you do with them, they will give you this gift, these gifts are hella you can take these pens or this Notepad or writing hearts or anything that is given to all customers, they're not these gifts are not exclusively given to those account holders, right. So, you see the difference between these types of gifts.
Number three is margin trading. margin trading refers to the practice of using borrowed funds from from from broker to trade the financial asset is financial asset could be a bond could be stock could be anything.
And merging refers to the effect or the amount of money that you deposit when you open an account with a broker. So, there is a broker here a company financial company, it could be a bank, you open an account for them investment account.
And you want to do margin trading here and you want to borrow borrow money from this bank or financial institution, you deposit some money like we tell you the minimum method and deposit you have to deposit 1000 or $2,000 or 3000. So, you can
get some loan from them with their loan and your money you start trading. So this is called margin trading. Now borrowing money is not without any cost, they will charge you interest the first problem is interest. They give you money as a loan, you don't carry it in your hand, but it is in your account and online you can use it to to to trade. So, the first problem with this kind of transactions is interest that you receive from the bank or the financial institution. The second problem that many Muslims and non Muslims do not pay to it, you know, pay attention to it.
Because there are some non Muslims in certain markets, you try to provide some Shariah compliant products. And they're in their minds in their understanding, Riba is only the amount
that is above the capital, the increase that is above the capital extra money that you receive as a deposit for your money, for example.
Right. So here
the second problem is the combination between a loan and between a sale
and this is a form of Riba or it might open door for Eva, and also last SLM, clearly for babies care, this kind of arrangement. So now what kind of sale is involved here because you need to pay the broker you're making a deal with him. You're making a transaction agreement with him that you pay him commissions and he pay in fees for trading through his platform right? The same time you're taking a loan from him. So you're combining between a loan and a sale. And as soon as I sell him in a famous Hadith, Jaco Nana Vu Salalah they will sell them and sell effin where
you need the combination and also last s&m forbade the arrangement of a loan combined with a sale. Why? What could be the problem here? Could you tell me if I make an arrangement with you? I'll tell you Okay, you asked me to give you a loan. I'll tell you Okay, I'll give you a loan. But I want to buy your car. Could you sell me your car? I'm not going to give you a loan unless you sell me your car. Here the broker he said he doesn't give you the loan unless you trade through his platform.
Now if you tell I tell you this, what could happen,
you might sell me the car. First of all, this is a benefit.
I wanted your cars Well, I'm willing to give you a loan, but I want to buy your car. The other option is you might actually decrease the price.
Decrease the price because you I'm giving you a loan, so you decrease the price because you are you feel like embarrass me or give me a good deal. Because I gave you a loan. So Sherry, I wants us to be very transparent. And to separate between different transactions don't take advantage of your brother or the other party, just because you are giving him alone, you're trying to push him, embarrass him to sell your car or sell us another item Allah and then he might as I said, give you a good a good deal because he got a loan from you, he feels embarrassed. Right? The end of the loan, as I said at the end of repayment is is a different story. But anyway, I also sell him clearly
forbade the combination between a sale and a loan.
In forex markets for example, non Muslims who are providing this Islamic forex accounts, they don't pay attention to this they don't know that there are so as I sell them, you know forebay the combination between a sale and between alone and these are brokers, brokers who give this product and detail Muslims This is a fully Sharia compliant The only thing you remove is the overnight charges they are a form of interest if someone within a keeps put his position open he doesn't close it before five o'clock the charge them overnight charges and they said you are a Muslim we'll give you a Sharia compliant account, Islamic account and then but they don't pay attention to this that
there is a combination between a sale and between a loan.
The number four what is called in the in the banks in the banking system, or banking industry is bank overdraft or overdraft protection.
So if you miss calculate your balance or you forget to deposit your money and you write a check for someone write your check could be bounced. And you'll be charged a penalty between $35 $45 maybe $50. But if you avoid these fees or these penalties, the bank might might offer the customers what is called overdraft protection and it is a form of law. Basically if you're you write a check to someone
and we call it NSF non sufficient funds right. And then instead of bouncing your check the bank will cover the rest you have in the account only 1000 because you check your check is 1500 and your customer or the person you wrote a check to check the check to the bank rate and he needs 1500 1500 but you have only 1000 in the account. If you have this overdraft protection, the 500 will come through from
from the bank and it is a form of loan and they will charge you interest for it.
Now, number five is credit cards here one credit cards. There are halaal credit cards, but all of them are prepaid.
All of them are prepaid. So Bank of Montreal see IBC they are offering
prepaid credit cards and civc is is having a card called Smart prepaid Visa card. Someone a brother from BC he told me I'm using it, I'm happy with it. It's serving my purpose and it's fulfilling my needs hamdulillah but there are some if you read the frequently asked questions, you go through them, they tell you that some Yes, you are allowed to book
a hotel room with it, you make a reservation with it. But some companies might actually ask you to use a real credit card. Number one, this is number one problem. Number two problem. Some companies they might charge you an extra 20. They don't charge you but the the put to hold on 20% they add extra 20% to it from your account because it's a prepaid right. And if there is no not enough money in your account, the transaction could be declined. So these are issues that are there with these prepaid cards but they are halland they don't charge you interest. The only thing they charge you around $7 fees and they tell you clearly no interest. Because if there is no money in your account,
this credit card will not will not work the transaction will be declined.
Some people are using them, some brothers and sisters are using them and he said they are working for us. So they using them as credit cards. There are some other brothers who told me this from Toronto area. They told me actually in Toronto, if you this prepaid credit cards don't help you to build a credit history. They said in Toronto area, some of the landlords, the don't rent, don't rent their apartments or their houses to someone who doesn't have a good credit. So these credit cards don't help you to build a good credit history. These are the issues that are related to this halaal credit cards.
They're all ama here, they are clear about it. They said the agreement is an interest based agreement. Because the agreement says that if you are late, they will charge you interest I everyone knows this, right. But they are saying
you can use one card, there is one brother who asked me this question. If you feel that you have a pressing need
pressing needs, so don't swipe it with every transaction. There are people who use it to buy milk with it to buy bread to buy coffee with it. And this is not right, I don't believe this is the right thing to do.
And I know brothers and sisters who opened this door for themselves, and they ended up with 30,000.
there that's 30,000 40,000 sent they know that they are now they have to pay interest, they don't have money to pay. And then they come to the Imam asking for an exit.
So now as you know that you cannot control your expenses, you cannot control yourself. Maybe she should stay away from it. But if you think Yanni, that you there is a pressing need for it, that you need it, you need to have to at least have one card in your pocket. You can have it with the intention of paying on time, with the intention of paying on time. And don't swipe it for everything.
With every transaction, use it only one time you go to some parking areas you don't pay don't accept the debit. And you'll have cash in your EXIM. For example, as I said,
you need to make a reservation, they don't actually have to prepare, then you can use the other card or log to hell and you have to be extremely careful for the sake of Allah subhanho wa Taala.
Now these are different loans in the modern economy. Now let's talk about some matters that are related to loans and deaths. Number one, the sale of debt by ordain
the sale of debt.
So you have a debt, you are a creditor, someone owes you money. In some cases, in some places, in some markets, you can sell this debt to someone else to a third party with a discount. But the sale of debt is not allowed and Cheerio
is not allowed in Cheerio. And if a person method and or any, or, or a business has a debt receivable from another party, they are not allowed to sell it with a discount, usually the salad with a discount
the sells with a discount because they want cash. Because this debt obligation is not a deal yet. He has to wait for one year to receive his money. He doesn't want to wait for one year. He doesn't want to wait for six months. So he would sell this debt and get cash instantly in your hand in his hand. This is the purpose of doing this. So now the traditional Muslim jurists are unanimous on this point that the sale of debt at a discount is not permissible in Sharia and it is tantamount to Riba because in that in in, in monetary terms is money is money right here one so you're exchanging money with money if it is the same denomination, in Sharia, you're dealing with the same currency Canadian
dollars or American dollars, it has to be at par value has to be exchanged for value. Let's see Canadian with Canadian right you might do it for any other purpose, you have $100 for example, and you want to exchange it, you want to change, it has to be at par value, otherwise it will be it is a form of freedom.
Now has the how this sale of debt is happening in the market. Now in our modern financial system. There is something called bills of exchange. They are sold sometimes at discount. They sell traders or merchants or business people. It's like a check but it is usually used for business operations. You know people who have
They're business people, they know what I'm talking about. So they write these bills of exchange, right is a written order from someone to another one, but it might be post dated, right? So the person the other person doesn't want to wait, he wants to, he wants cash in his hand. So he goes to the bank, since it is a well respected document, the bank will accept it. And the bank feels that it is a secure document, we will accept this bill of exchange, and then the method and the amount 100,000, they will give the customer who is carrying or holding this bill of exchange, let's say 95,000, or 96,000, what is the profit of the bank here is the difference, the difference, because at
the time when this bill changes due, then the the bank will get its money, the full amount, which is 100,000. So the profit of this bank is around 3000, or 4000. That's an example
also what is called similar similar, there is a similar concept
that many people not business people anyone can do it with, which is called cheque discounting or check cashing services, you are aware of that money, Martin those companies, so you have a post data check, you don't want to wait to cash this check and go to these places, they will take a percentage discount, they will not give you the full amount, there is no point for them to do this business for you. Right, they take your cheque they give you
you know, they don't give you the full amount, they give you a mess, only take 15% or, or a defense, maybe every every company is different or transit film for you from your check to give you the rest of the money when the check is due, then they will cash the check, and they will check take the full amount. So this is a sale of debt. There is something else that may maybe many people are not aware of
what we call today, and it's tax season, tax income preparation services.
So the file your taxes,
and then you could get your refund instantly. But they don't give you the full amount. Because when the file when your taxes are filed, and you have the right to receive a refund from CRA, you become a creditor, there is a debt obligation that is established here. You become the creditor and and the CRA is a debtor the oil money, they have to pay like $500. But you don't want to wait for two weeks for CRA to deposit this $500 in your account is what people do. They go and file the taxes through these companies. They're called tax income preparation services, they take 15% from the first $300.
And then they take 3% or 5% from the rest of the money. So if you owe her if CRA owes you like 1000, for example, your refund is 1000. She's a good amount of money right? From the first 300. We take 15% and the rest 700 we take 5% right? So they take this amount and that will be their profit, forgiving you instantly cash in your hand. Right? This is a sale of debt because that was your debt. CRA owed you money, right? That was your debt, you sold it you decide to sell it to this company, right. So at a discount at a discount. So their own ama the classical scholars are unanimous on this point, this is not permissible.
Number four, there are some builders selling the debt receivable from a customer to a third party at a discount. This is something that people in Toronto area they told me it's very popular, I don't know here in Calgary, but I mean, it's possible for some people to do it here. I mean, I don't see a difference. If it is being done in Toronto area, it should be done here too. But I didn't meet people who told me that they are doing it builders. So the method and they say a builder is building a house for a customer. And the price, for example, or the value of this house is half a million, I say to be paid within six months or fully paid within one year. But the builder needs cash. So he
doesn't want to wait for this to receive this half a million right after one year. He will sell this debt is a debt obligation here is a contract between the builder and the customer who wants to house so he would sell this package the whole package at a discount. He would sell it for 160 for example to another investor. So this investor will give him 460 and then he will wait. At the end of the year he will receive half a million
How much was His Prophet
40,000 and that is not permissible in the Sherry of Allah subhanho wa Taala.
This is the first matter that we need to pay attention to regarding debts and loans, paying back the loan with a different currency. There are people who asked about this, are we allowed to pay our loans with a different currency? Now, we need to know that the basic principle and Sharia is that loans should be repaid in the same currency as they were taken by the borrower unless the two parties agree to make the repayment in a different currency, it is permissible with some conditions, what are the conditions that we need to pay attention to? Now,
the first condition is their odema. They said it is permissible to pay your loan or repay your loan in a different currency as long as there are three conditions or three conditions are met. First one, there should be no pre agreement between the two parties to pay it in a different currency.
What is the problem here? If he gives him the loan, I give the loan to my brother 1000 Canadian dollars, right? But I tell him, okay, at that time, you pay me six months later, but I want American dollar American dollars. What is the problem here?
There is an exchange. So you agreed on making an exchange and what is the problem?
because that will just keep changing right and but you are fixing right now.
You don't have to fix the rate. You can agree just agree.
You don't have to fix the rate just agree make an agreement that the repayment will be with a different currency
the currency to different
I say that alone.
I don't know a lot of I don't see it from that perspective. The variable problem there is a deep problem regarding river when we do exchange when when we exchange currencies. Yes, brother.
Yeah, the delivery, the possession has to be immediate. It's Hillel to buy and sell money currency, but it has to be immediate, whether you see it in your head or it is deposited immediately in your bank account and you have immediate access to it. So, when I give my brother alone with one currency and tell him after one month, I want to receive a different currency need to repay me with a different currency I am making an exchange but there is a delay in what
in the possession right. This is number one, so the two parties cannot agree on this. Now the second condition they said the rate of exchange at the time of repayment should be the current rate of exchange the current
at the time of repaying the loan, now that the time he took the loan from me or I gave him the loan,
so he took the loan from me one month ago, that's a different trade of exchange, right? But I am paying him or he's paying me the loan today. So Rasul Allah, as I said, and said that it has to be at the current rate of exchange. And they cannot if they agree to exchange to do the payment in a different currency at the time of the repayment, we cannot leave a portion of the loan to be repaid later, because they agree to make the repayment in a different currency. Right. What is the proof? The proof is the famous hadith of neuroma the Allah Allah Assad of Omar mahatama the Allahu anhu He said, I used to sell camels for dinars
to be paid at a later date.
But except Durham's, they used to use dinars and Durham's, so he would sell with dinars.
It's a credit sale.
Then after that he would accept Durham's as instead of dinars, the customer will tell him I don't have dinars. Can I pay you in Durham's and when Omar would accept Durham's instead of dinars, or he would sell his camels with their hands and at the time of the repayment the person will the customer tells him says I don't have I don't have Durham's Can I give you pay you and Dena
And he would accept in hours right then he went to Rasulullah sallallahu alayhi wa sallam, and he told him about this practice. So, he said there is nothing wrong with taking it based on the current price. So, long as you do not separate with something outstanding needs something left you agree on paying it in a different currency, don't leave anything pay everything on the same day with the current rate of exchange, because if I pay if I if we if I allow him method and to to fix the rate, he might even increase the rate and he might benefit from the load
or if I give him my own rate, I might lower the rate and what what will happen, I make volume to him, I teach him with injustice, but if I give him the same the current the current trade of exchange, if he takes the loan from me and it goes to the market, it will be the same his money he received the amount of his money that he gave it to me as a loan you see the the problem where do you see the point?
Are you able to see here the sharing the idea, the justice of Sharia.
Okay, at the end, inshallah, we'll talk about these things.
I'll allow you to ask questions. And Shawn.
Now, loons at the time of death, someone
money or other people owe him money. He is either a creditor or a debtor, and he died he passed away. So remember Shafi Rahmatullah Allah has told us about the principle in his book alone. I will say it in Arabic and then translated, he said, either matter Rasool Allah who Allah nursey Do you own in Do you know Isla Ashlynn for her Isla le her letter Hello bimota Well, locality Do you know Alan matey either Ajay Lin Fela Allah Mohali Finn, Hafiz to undo me man lucky to be an ohana. So, remember, Chef, he told us about a basic principle regarding loans and debts at the time of death at the time of death sorry at the time of death. So he said if someone dies
and other people and his creditor and other people sorry owe him money.
What will happen?
No, he owes Yes, other people owe him money. Then do you need an agile for her Elijah Ashley Hello, hello bimota then the inheritors or his family have to respect that that line, they cannot come to these people and tell them you have to pay us this loan immediately. Because our father died and we need this money.
But then he was supposed to pay him after six months, and he died today. His family cannot islamically go to the the debtors and tell them you owed our father method in life say $10,000 you are not they are not allowed to do that. They have to respect the agreement that their father made with this debtors. You see the difference. But the opposite.
In the case where he owed other people money.
When he owed other people money and he died, then the his family has to pay his debt they have to pay they have to pay his debt from his inheritance immediately. So the spend on his they have to deal with the expenses of janessa. Number one, this is the first hack.
And then number two, we have to look into his debts and the need to pay his debts. Why? What's the difference?
What's the difference between the two cases Yes, give me
he might be punished Yanni EV they have to relieve their father from this obligation. He passed away you know that I told you that. I don't know if I told you this in the first part, that also last I sell them didn't want to offer Jenna's a prayer for someone who had had a debt died with a debt. Right. He wanted to actually to encourage Muslims not to keep to pay debt to pay their debts right? But Subhana Allah when Allah subhanho wa Taala gave him money. And he's
Allah, Allah Fattah, Hallo he and he opened the doors of His mercy for him. He started actually paying
the debts of those
who couldn't pay their debts, those who died at the time of janazah. If he knows that the person has left some debt, he would pay from his pocket Allah is Allah to a sinner, Alana older, the Muslim Mina.
this is the difference between the two cases. In the first case, the family members or
the family of the deceased have to respect his agreements with his debtors, and they have to wait for them to pay within the six months one year. But if he owed other people money, then they need to relieve their family member from this obligation and pay his debt immediately.
And Imam Shafi he said I don't know any other scholar at my time, who disagreed with this. And Mr. Musharraf, he was a great scholar. But he was talking also about other scholars who lived and they were highly qualified, who lived during his time.
Now, I'll tell you about some alternative Hillel alternatives to good loans, and interest based loans. You know, there are people who, of course, any Muslim is not supposed to take an interest based loan, right. But sometimes some Muslims also feel embarrassed to go to a friend or a family member to ask for a loan. A good loan card hasn't, what are the other alternatives that are available there.
So there is something called tower rock an idea just if you want to do it, I mean, it's an idea. Keep it in mind, if you need it, you might do it. Something called tower rock. And it's halon. What is this tower rock, it was very popular in the old days when people didn't have banks. And
if he doesn't want to go into a family member or a friend and ask him for a loan, he would go to someone who has an item of value method. And let's say something that costs
it has a value of $10,000 $10,000, for example, and he would make an agreement to buy it from him on a credit sale.
So when people make credit sale, they increase the price the brother was talking about whatever, ha remind me to talk about whatever if you want, if you wish, so they increase the price. So instead of selling it to him for 10,000, he would sell it to him for 12,000, then it is helpful if they agree on that time value of money is permissible in this case in Islam. So time value of money is not permissible in Islam, except in two cases this case and sell them sell them. It's a different story. It's a different type of sales. So here, he has a debt obligation, right? It's a credit sale. So the agreement, he makes an agreement with this person to pay him every month for example. 1000 Canadian
And then he goes to the market and he will sell this item for a cash prize, which is 10,000. What happened here? He received in his head
And it's Halloween.
Yes, he has a debt obligation. He will be paying the other person 1000 every month, right. But at least he needed money in his head and he got this 10,000
right. This is called tower rock.
Challenge. Yeah, you can sell it with the same price, you can sell it with less he can sell it with 10. This is an example. Just an example.
It's up to him, he might sell it more. If he's able to sell it for 13,000 it's Helen for 15,000 it's Helen for less, it's Helen and it's up to him. Because the moment he made this credit sale, then this item becomes his own property. Now this is your own property. This car is your own property. You go to the market or someone else and you sell it to him with any price you want. This is what you want. You want cash money in your hand. This is hella you got cash money in your in your hand.
There is another form another option which is haram. It's called bayarena is the same thing they used to do with some people in the past. I don't know nowadays, that I heard that. Some financial institutions in some countries are doing this but I'm not sure about it. This goes by Elena. So he would make a credit sale with him for 12,000 for example, right. This is a debt obligation. Now he has to pay him 12,000 on a credit sale to defer payment every month he will give him one but he will sell the same car back to the previous owner.
For less of course, there is no point for the previous owner to to buy it again with the same price or a higher price there is no point to will be since it doesn't make any sense. So the previous owner will give him 10,000 cash.
You see the problem here? What is the problem here?
What's the problem here? He bought this car from him on a credit sale for 12,000 and it's a credit sale is supposed to pay him back within 12 months, but then he takes this car and he would make an agreement with the same person and he will sell it back to him for 10,000 What's the problem here?
No, there is a clear problem here
that is not
to basically in Islam you are allowed to combine between transactions unless this combination leads to Riba or to or to horror uncertainty, something that is haram. So here there is a problem in it.
If you if you figure it out, then you end this er Masha Allah era. Yes.
There was there is no borrowing here. Landing landing relationship, but it's a sale. The first one was a sale transaction was a sale The second one was a sale. So it's not alone. The first one was not alone. It's a credit sale.
buyer doesn't have the cash.
He doesn't have the cash. This was
the vehicle back to the same person.
I know that I mean, He's good. He's giving he's receiving cash in his head
is 2000 different theories 2000 different so what's the problem?
this is a form of rebate.
Because the car here just the medium to make it Hello. He gave him 10,000 and he will receive back from him. 12,000 is a form of Riba. I want you to use the term Riba it's a form of river it's called bellina.
Because the car is not meant here, is used actually to facilitate a haraam arrangement. But if he sells it to someone else, there is no connection between the first transaction and the second one, he goes and sell it to another one.
If he sells it in the market to someone else, there is no relationship between the two transaction. The first, the seller of the car, who made the credit sale is not benefiting. The only thing he benefiting is a sale that he made the sale. And this is Hello, hello, hello, hello via wahama Riva. The second option it's River. So anyway to work with is the first case is a way of getting cash in your hand.
If you want to do it, it's helpful.
But if you do it with a company with a dealer, he will might put a lien on the car or law then all the time you sell it, I think he will ask you to for immediate repayment. Am I right or wrong?
Yeah, if you sell it, they will ask you for it. So you don't benefit from it. But if you make a private arrangement, where you can benefit from this, I'm saying this because there are some Muslims who believe that he doesn't own fully own the car unless he fully paid it, it's paid off, then he becomes the owner of this car. No, that's not true. The moment you make this agreement with the seller, even if it is a credit sale, then it is your ownership.
And you can do whatever you want with it. Number one, number two, number two, another hallel option for you know securing some cash in your hand. Something called tender and tender is is a South American term.
In Arabic, it's called Gemini yet and morphine. So it is like a voluntary rotating loan Association. or, or,
or it's called informal loan club. So people get together it's a form of short term interest and free any interest free.
interest free loan within family members and friends. People come together, they use the concept of money pool, everyone would put like every month with a $500 1000 contributes 1000 to the pool. And then every month one person from the team will take the whole amount.
Right. It's called in Arabic as I said they call them in the Arab world. jumeriah and morphine.
It is known in different cultures in different societies. In South America, they call it tender. But if you check this term, you have to be careful. There is a method and financial institutions called tender financial, they deal with River. But there are apps, you have to be careful about them apps. I don't know if all of them have some problems, but they do. They follow the same concept. Online, people do not do not know each other five people online, they come together and they do this kind of arrangement. I don't know how they secure the payment, and there are apps. But the problem with this app, some of them, they do what the the they don't do a draw islamically either you do a draw, or
you see who is in need for money, then you close it, you put them in the in the beginning, like number one or two and three, these people need cash immediately. So as a brother, we cooperate with them. And he said, okay, you take first month, Mr. Mohammed will take the 10,002nd month and he will take the 10,003rd month because they need money. Right. But all the other the other way, as you do Cora Cora, which is the draw, right? And then you pick the names, whoever his name appears first, who will take the first amount. It's called tender. As I said, there are apps, these apps, the people who take first they will charge them some fees. And the the people who like to be at the end
of the list, they will give them some extra money. So this is
right. But this is I mean, as I said, it's known popular in many cultures in many societies, but it is possible to do it in a halal way without any increase. To do it with Helen, the only thing is, you have to be careful. You have to know the people, the people you do it with them, you have to know them very well.
You have to know them I know a story where some ladies group of ladies came together and did this arrangement, one lady took 40,000 and if she fled the country
40,000 is not going to buy her Jana. But this is the no the weakness of you know, as humans, we have this weakness, love for money, Panama. And we're sometimes willing to gamble with our athlete on
our future our relationship with Allah subhanaw taala for a small amount of money. Anyway, so this is something that this healer, there are some rula he said it is helpful as long as you don't, you don't stipulate you don't make a condition on the team members to participate in a second round. It is a matter of disagreement. But this is simple. It's very easy to if you want people to participate in a second round and a third round, don't make it condition give them the freedom to participate in the first round. Someone said okay, just come along here. I benefited from this I don't want to participate in a second round. So can you replace him with someone else? right if you want to do it
for the second round, don't make it a condition if you don't make it a condition then it is purely Helen Sharla there is no no problem. There is no problem with it. Just give me a few few minutes and then we will finish inshallah will we still have time till 930 inshallah for Asia, but I'll finish within two minutes.
Now, I want you to say to two
Do you know something? yanira sola sola made a very strong statement about those who delay the repayment of their loans or purpose. So he said mutlu, I was an evil man.
He said motlow, honey, Vermont Matt londiani the delay in the repaying a debt by someone who is wealthy or someone is able is a form of injustice. And we know hustle hate any one of the classical scholars counted it as a major sin, that people who do it
and those people you know, those Hadees that I mentioned last Friday, that the person could be denied access to gender until he settles his account with the debtor the creditor, until the his problem that problem are solved right. This problem could deny him access to Jenna. The Hadith is about those people who own purpose, delay the repayment they have the means but the the delay the payment, they want to use the money, he's a businessman, and he doesn't want to pay his 10,000 on time. He said I will use it in my business, not for loss and sell themselves. This is a form of injustice. This is a form of injustice. You agreed with him to pay him back after six months, then
you have to pay him back after six months. If you have
means if you don't have you can make a request for a delay right?
Or you look for another solution another loan, you get another car hasn't from someone else, and you pay him back. But don't do it on purpose because it is a form of injustice. I received some questions from some brothers
credit cards we talked about it is cashback amount from visa, okay. cashback is a gift from visa company. So if if you think that you are using this visa because you are facing a pressing need, right? This is your assessment, your own assessment, I cannot myself I cannot make an assessment on behalf of everyone. It's your own judgment. If you believe that you need it, and it is a pressing need, then this cashback was would be helpful for you because it is a gift from the company. But there are other odema who believe that this is an interest based agreement. We shouldn't own these cars. We didn't use them. So they don't believe this is valid or long. But if you are doing it with
a valid reason, using this card with because you have a valid reason then they should be held at cash back it's a gift because the company is now the lead is not the lender. Sorry Yeah.
The company is the lender and you are the borrower right.
But the lender is giving the borrower in this case, what is haram? Is the borrower giving borrowing the person the borrower giving a gift to earn extra money to the lender? This is what is Hara This is what is interest?
Can we open saving accounts our rule and I said if there is no need for them, we should didn't open saving accounts, we should open checking accounts with no interest. Because with every saving account, they give you interest, right? Unless there is a need for it. It's a vehicle for you to save taxes to reduce your taxes, that's the difference. So, you feel like there is a need for it and you monitor this account and you give this interest as a donation. You know this is an interest that you give it as a donation. If you feel like that there is a need for you to open this savings account because you will want to have RSP or RSP for your children or as I said you need a vehicle
to save to reduce your taxes for this purpose Yeah, it could be inshallah permissible but you have to monitor your account and donate this interest.
Now mortgage and I received some questions from another brother about mortgage, the Federal of some other scholars like chef Yusuf Al qaradawi, we talked about it. We have I have maybe five lectures about this subject. online you can you can listen to it.
When I talk about it inshallah, in the future in our workshop, it will be at the end of the month, most likely the information will be available about this workshop.
Maybe tomorrow, maybe tomorrow shala rafters tomorrow on our website.
Now, I'll just give you time for your questions now.
We still have like 15 minutes for a show
or before before I before before we deal with your questions.
I have still two Friday hackers and inshallah the next hallahan March 22 it will be in the new location right
pays me later. So we'll open this location the new location March 22. Wave Nila will might keep this for Friday prayers, you have five daily prayers till the end of the month. But first zoom out the next time I will be there inshallah and Friday halakhah will be in the new location and you know the address is everywhere.
Now, I want to make Matura with you. I have two other halaqaat actually four, but two of them related to this subject. One of them is called financial justice with family members. It will include wills, will documents and inheritance issues. You know, and will the importance of writing a will in this in this land. I didn't do with this presentation. I did it in other places but didn't do it in IC. This is one option. And the second option there are some beautiful do as that Rasul Allah says lm supplications taught us for someone who wants Allah to help him to pay his loans, pay back his loans. Do you want to learn about these to us?
So we do them in halakhah we explain them and I'll try to put them in a PowerPoint presentation so you can see the derive from to view and then we'll talk about their meanings and do you want to do that?
Okay, are you interested in the other subject which is will documents and inheritance
okay, because the other options are
Shura importance of sure we might do it on a different occasion.
And the other option that I had in mind the mentality of However,
it's a different, it's a different
a different subject. So maybe next time we'll we'll do the financial justice with family members, and it is a PowerPoint presentation. The other one will be inshallah to that do as supplications will be a PowerPoint presentation with me later.
So, we will go with this option inshallah. Now, your questions
yesterday, go ahead.
Question is a TD Bank, what they do is,
they allow you to not count, yeah, the monthly service fee is very high. But they so they tell you, if you have a certain amount, they allow you to what
they call it, you're gonna call me and tell you that if you don't pay this monthly fee, per month, developer month,
if you have a similar amount of money account, they will waive this fee.
And then you will get other bills, they give you the ability to secure your credit card, first class, Travel Visa, and we don't pay, you don't pay yearly 150 a month in the yearly membership, we don't pay that they were so so you can have one visa when you need it or not. And then they're gonna waive your monthly fee as long as you maintain your constant balance in your account. So what would you say about that? Is that permissible and in that visa, Visa, you if you use the Lord, traveling or buying stuff, you get to wait. For instance, like cashback, as I said, if you believe is this, this is your assessment, you believe you are using this card for a valid reason, there is a pressing
need for you to use it. You can benefit from points of cashback when it comes to waiving the fees. I this matter was discussed by a Muslim scholar who wrote a PhD about this subject loans, rules regarding loans and debts. And he discussed this matter two opinions among contemporary scholars. One of them he said is permissible. The other one said could be macro. But based on his analysis, he found out I read his analysis, it should be fine. It should be Hello. So we keep marking my 15,000 in your account to allow the we the wave the monthly fees for you. Right? So this is Halle Shonda? Right? You don't have to pay them these fees. Okay, this is number one. Number two trouble.
The Okay, Okay, go ahead. Go ahead. I meant this brother. But go ahead. Go ahead. situation is the lenders pay
getting the money as a loan?
That we'll get back home and the
70s. One of the movies. Now, after one year, it's the same on public office back for up to one year before is not going to pay
the same amount of $1,000
and it will be 130,000 Yeah, technically, the person
is getting the exact amount which he was giving one 1000 Canadian dollars, but the other person is losing money because of extra extra it is permissible This is the way it is he got from him 1000 in Canadian, he should pay him 1000 in Canadian
that's why I was so lost I still am What did he say? He said if you decide to pay him back in a different currency, let's say rupees Pakistani rupees, then it should be with the current rate of exchange and the current rate of exchange will be 130 1000. Right? He instead of giving him 100,000 he should give him 130 1000. So the person this person, the owner of this 1000 Canadian if he goes to the market and makes the exchange he will receive for 170 1000 his own money. One Canadian, and this is Adana justice. If you think about it. This is ultimate justice. Right? Hello to Alan. Yes.
RSP or RRSP or the pension plans or RSP
savings account to connect with a parent to
benefit from the money
invested there's a limited option for you when you can invest it because it's not on your money that the government money. Yeah.
They tell you you can only invest in these five or six
bonuses, one of them was mine. So there are some books that the least in financial institution
Imagine that which is like
you mean the companies? Yeah.
Kareem, regarding our ESP, you're asking if it is halal or not, they investment in a bond where there is zero risk
revenue is or the return is guaranteed. In theory, investment cannot be guaranteed. It's a it's a form, it's an interest like interest cannot be guaranteed. Right? Cannot. So either you go for a self directed savings account self directed, yeah, and you don't leave the money and you don't invest it. Or the other option there are there is something called cherry indexes, cherry indexes, like we have here in Canada, it's called cherry SMP cherry I 60. Index, you can invest in their companies, right. And they tell you, if you go and study there, they have a policy there and they have a criteria they follow. You can read about them and do your research. All you do another
research about some companies in Toronto area that are offering a halaal or ESP. I don't have a clear idea about those companies where you can make some research, find out some of them how, you know how hell are they allow any I'm not sure but you can make a research and help us get get, you know, help us with some more information about them. I don't have a company in mind that tell you they are offering halon RSP. But you can open this account for your children, you get the money from the government, it's healthcare, the only money that would be Haram, the interest that would come from the bank, if it is a saving account. You need to donate this interest coming to the account. So
you deposit some money your money's held and money coming from the government is hell and there is some interest coming from the bank, give it as a donation
to to you know, to help your children get this help or this money from the government. If you want to invest, as I said, there are some companies that are saying that they have halaal RRSP or RSP especially in Toronto area or invest in what is called cherry indexes. Yeah.
Now nothing from the
Yeah, the fees Yep.
It's okay. I mean, because
the you are, you are the lender, and they are the borrowers. So they're not supposed to pay you extra money for that you are paying this fees because of their services. They have bank machines, they have a debit card, so they're giving you services with this loan with this deposit. So the road MIT said these are fees administrative fees and their health
I don't know if there is none interest savings account. Okay, that's good then this is a good option. This is a good option. Yeah, Masha Allah good information. I didn't know that. No nine to saving account okay.
Okay, then you don't have to worry about Riba in your account Go ahead.
Lot of stores
sometimes there's a few
stores that give you a credit sale
Yeah, if there is no third party involved, but usually there is a third but if there is no third party, it is between you and them It should be held it's called by a taxi it
may or taxi it.
What kind of fee need to know what
yeah, it's okay. That's fine.
Yeah. So no, the only thing is, I'll give you the basic principle and then he tried a few method and talk to them. If there is no
documents to be signed from a third party.
right because I know one time I went to a furniture store I was talking to him. I said you know the one if you get buy this with a credit to one who will give you the loan, finance the deal is a different company. So he will sell them your information. And then the tell him that is
Suppose if this person has a good credit or not, so it's a third company, company financing company who will give you the loan, pay on your behalf the full amount. Let's say you buy this furniture for 5000. This company will pay for the whole amount. But there are some companies they have their own credit department like Toyota, Toyota credit, right? their own, or some other companies, they have their own financing department, if you're dealing with them.
With an extra with a different price, a higher price, it's highlighted. Here time value of money is accepted in this case, because it is a credit sale,
right? Credit sale and you're gonna pay within two years or three years to increase the price for this purpose. It's harder This is not rare, but there are people who said oh, this is like Riba. This is not River. This is a sale, they're not giving you a loan, they are selling something to you with different terms.
Don't compare it with Riba don't compare it with one the bank and a financial or financial institution that has nothing to do with the transaction has nothing to do with the item being sold. They come in because they want to make money out of money. So they give you the loan, the pay on your behalf. And then whatever profit they make, it's a form of Riba.
I know, I know what you mean, I know what you mean. So they give you like a grace period. Yeah. So it will become like the concept of visa or credit card, any credit card. Yeah. And if you think that there is a pressing need for you to buy this item there is so you need to pay on time and also if you can get get rid of late fees, or pay on time, so you don't end up paying late fees. So late fees is another form of Riba so you try your best to fear Allah subhanaw taala as much as you can do business in a halal way as much as you can we live in a different environment by the way any the financial system that is built now that's being built was not built with
in with Shetty in mind or Islamic values in mind. So that's why we're finding it difficult to buy things and, and buy houses and do and do business in a halal way. Now is not because Islam is difficult, is not because the last month Allah wants to make things difficult for Muslims. No, because the environment we're dealing with is a different environment.
Anyway, now I'm sisters, you don't have question?
If you want a if you don't want to ask you can write down your questions and send them if you want.
We have only three minutes left. Malaysia
we have to join mine in agreement versus that in Middle East
then someone when are you going to be exactly see them? I don't
know it is not. You have the right to so the brother is asking back home when we give a loan to to each other. Or you tell him when you're gonna pay me back. He will say Well, unless pantalla makes it easy.
It is not accepted. I mean, it's you have to have a deadline. Even if it is verbal, right. You need to have a deadline.
And don't get offended if your brother asked you for a date of repayment. Or if he asked you to write down the loan. This is what the last panel attallah told us to do is Oracle bacara A today in you know that the longest iron salted butter in the Quran in the whole Quran is today, a verse one verse,
full page talking about these etiquettes of you know how to deal with loans and debt. And also you can have have a guarantor or you can ask for a guarantor.
Especially if it is a big amount will you have the right to ask for a guarantor to do witnesses to sign the contract with you as witnesses so all these things are there in the book of Allah subhanho wa Taala
SR Yeah, go ahead.
Read house one time.
She was denied any.
Yeah, so is the same thing caddy that awesome landlord
Zero asked for a credit history. Anyway this could be
when if you feel as I said the assessment I will leave it to you and Toby will have sake if you think that you need it you really need this card you can have one card in your pocket and use it when you need it. You don't use it every day on a daily basis so you can collect points
okay don't do it this way. Stay away from this as a Nazi huh? From your brother stay away from it because you know other people who yes never use it will never get it. No use it when you need it. And you build some credit
on the credit actually by you buying something Yeah, as I said when you need it you're gonna want to book a hotel room when you
make a reservation or you book a car and you will be using it and then you build some credit
multiple times you go open the door for evil for yourself as I said people who got it with this intention Sharla Muslim I'm not going to deal with Reba. I will just use it when I need it right and then they started using it every time and the ended up sometimes they faced in emergency to get a loan you know advanced when you get a loan cash the company charge you interest right away. You don't give you a grace period. And then we come to the masjid talking looking for the Imam asking about a solution or an exit you know what I mean?
that so what do you use it only when you need it? You're showing a loss pinata Allah Allah I know that this could be haram but I'm using it only at times of need.
You see the point.
But I see the point. You're not like someone who uses it every day with every transaction. He doesn't care. You know what I mean? It becomes normal part of his daily life.
So yeah, the the message that you're sending to your Creator, your ally, I'm using it only at times of need.
Okay, she's not gonna love hate and subhanak alone honey should