Fatwa #1145719 April 2004India
How the islamic backs function...2) How can one save taxes if there are no islamic banks.
Question
My question is How the islamic banks normally function, how the members are paid and how they give loans when they do not charge interest arent they at risk of loosing their money. Please give details and if possible a good site abt. islamic banking. Can we as friends contribute an amount and function as islamic bank whereby we help the needy and later the party has to pay a profit to us which can be utilized by the members since all the contributing members are taking a risk of their amounts. 2) How can one save taxes if there are no islamic banks.
Answer
The Islamic ways of business and economics are vibrant and dynamic. There are many institutions of earning money, for example, Muraabaha (buying and selling on profit), Mudaarabah (partnership of investment and active participation), Shirkat (general participation) which are of many types.
Interest is prohibited and in fact detrimental to business and economics. The rich takes advantage of the desperation of the poor who is further disadvantaged with paying large sums of interest in lieu of nothing. Islam does not believe in such an immoral way of making money. There is much consideration to the work and contribution of the poor and needy.
and Allah Ta'ala Knows Best
Mufti Ebrahim Desai
Interest is prohibited and in fact detrimental to business and economics. The rich takes advantage of the desperation of the poor who is further disadvantaged with paying large sums of interest in lieu of nothing. Islam does not believe in such an immoral way of making money. There is much consideration to the work and contribution of the poor and needy.
and Allah Ta'ala Knows Best
Mufti Ebrahim Desai