Issue 1089: If a due date is specified for the repayment of a loan, the creditor cannot claim the repayment before it is due.

Issue 1090: If there is no specified due date for the repayment of a loan, the creditor may demand the repayment at anytime.

Issue 1091: If a creditor demands the repayment of the credit, and the debtor can repay it, it must be paid immediately, and if it is delayed, the debtor will be deemed a sinner.

Issue 1092: If a person who gives somebody a loan lays down the condition that the debtor will have to repay more than what they are given, and if the loan is advanced for producing and trading purposes (not for one’s livelihood, subsistence, or repayment of debts), it will be legal and permissible since it does not lead to the prohibition of the good and is considered as a means of helping business and economy flourish, although it is desirable to take precautionary actions so as to avoid taking such interests; however, if the loan is to be paid back with interest, and if the loan is taken out to satisfy one’s living needs and subsistence, it will be deemed illegal and taken as fighting against God and the Holy Prophet and nothing would justify it; for instance, if a person gives 3 kilos of wheat to a person and stipulates that they should return 3.5 kilos of that, or gives 10 eggs and demands 11 eggs in return, it will count as usury and therefore it will be considered illegal; even if a person stipulates that the borrower will have to do something for them, or to return what they borrow along with something else, for instance, if they lay down the condition that the borrower will have to return the sum of money they borrow along with a box of matches, it will be accounted as usury and thus illegal; also, if the lender stipulates that the borrower should return what they borrow in a particular form and shape, for instance, if they lend a quantity of gold and demand golden ornaments in return, it will be considered as usury and thus illegal; however, if no such condition is imposed by the lender and the borrower willingly returns what they borrow along with something else, it will not count as illegal and it is even recommended to do so.

Issue 1093: In the cases of those loans given to fulfill the borrower’s living needs, if the lender imposes the condition that they will take an extra amount of money in return after some time or that the borrower will have to do something for the lender, for instance, if they lend the borrower 100,000 tomans and stipulate that the borrower will have to repay 120.000 tomans after one year, it will be considered a usury and thus illegal.

Issue 1094: If the lender does not lay down any condition so as to take back extra credit, but the borrower willingly repays more than what they borrow, it will be in order, and it is even recommended to do so.

Q1095: Does the interest received on the bank deposits count as usury?

A: If they act according to the rules of the Islamic Republic, it is not considered usury.

Q1096: Is the case of a usury contract between a father and his daughter just as it is between a father and his son?

A: Whatever the case, if the money is borrowed to cover one’s living expenses and subsistence, it will be illegal.

Q1097: A person has signed a contract with an Indian Sik’h in one of the Arab countries. After some years they came to know that they own the Sik’h as many as 1000 Dirhams, but cannot find the Sikh to repay them and do not know where they are. What will the verdict be on such a debt?

A: It is permissible to give alms with that money on behalf of the Sikh, that is, to give it to the poor so that the blessings will be the Sikh’s.

Q1098: Does passage of time abolish one’s legal rights, or does the debtor have to repay their debts despite passage of a long time?

A: One’s legal demands and right may not be abolished due to one’s ignorance about their legal rights or due to passage of time, and it must be said that it is illegal and sinful to delay one’s repayment of debts.

Q1099: If a person borrows some money, and at the time of the repayment it is revealed that, due to inflation, the value of the money has reduced such that the lender would come to some harm, will the lender have the right to ask the borrower for the amount to which the value of the money has reduced? If yes, then may the criterion be the value of gold at the time of borrowing? What will the verdict be if a debtor ignores the repayment of their debt at the due time? Will such a person be subject to compensation of the reduced value of the money they have borrowed?

A: One may, at the time of lending, lend the value of their money to the borrower, considering how much it is worth of gold or something else, for instance, the may say, “I will lend you this money which is worth 2.5 grams of gold, such that you will have to repay me the same value in cash currency at the due time”. In case the debtor delays the repayment of the debt, the lender can claim the delay provided that they have laid down the condition while concluding the contract, for instance, the lender may say, “If you do not repay the money at the due time, you will be subject to compensation”; and if, without having laid down such a condition, the lender claims the compensation for the delay which is reveled to have been due to negligence and time killing despite the borrower’s being able to afford the repayment, it will also be permissible to claim the compensation.

Q1100: There is a fund which grants some people loans for one-year periods with the agreement of the board of directors, so that the borrowers may invest the loans in business; the borrowers are not asked for payment of any fixed interest, but are supposed to willingly pay as much interest as they want; the borrowers usually invest the loans in construction work or use the loans to pay the deposits for purchasing houses and goods. Are all these cases considered as business investments? Is the interest paid in this manner legal?

A: The interest which people willingly pay under no obligation is permissible, even if they have not fulfilled the terms of the contract, because their willingness to pay such interests and the agreement of the lenders serve as satisfactory reasons to render such contracts legal. In short, from the most pessimistic perspective, one may consider such contracts and the act of taking possession of such loans by the borrowers as void which itself would be resolved through the satisfaction of both the lenders and the members of the fund, i.e., as for the interest the borrowers pay, since they are not obliged to pay a fixed rate at the time of concluding the contract and the interest is then willingly paid by the borrowers, it is deemed permissible and legal.

Q1101: In some Muslim countries, loans are of two kinds, namely, production loans and consumption loans, so that a person may not borrow any money to cover their living expenses and subsistence or for the repayment of their debts (which are examples of consumption), but to invest in some business and gain some profit on it. Can we conclude that all the legal evidence on usury is to address consumption loans and not the production loans?

A:Production loans with interest are not considered illegal as they do not lead to prohibition of the good and they even lead to a booming and healthy economy; however, as a precaution, it is desirable to take any sort of action which would help to avoid such interest; and the evidence concerning the illegality of this kind of interest is not as considerable as it is in other cases. “Riba” means “extra”, and of course it is not just this sense which leads to illegality of usury and there must be a particular intended sense which is, along with the concerning tradition and evidence, taken as usury and this applies to those cases which are referred to as consumption loans for the repayment of which, some debtors would-we seek refuge in God- compel their mother, sisters, and daughters to commit deadly sins; the well-known tradition, “A Dirham gained on usury is more deadly a sin than is committing seventy cases of incest”, is apparently relevant to such cases”(Wasaa’il-ul-Shiite: Vol. 18: Baab 1, Abwab-ul-Riba,Hadith 1).

Q1102: To take out housing loans from some financial institutions, people are required to pay deposits as interest-free deposits. Does the tradition, “any loan which brings gain is a case of usury”, indicate that all cases of giving and taking interest are deemed illegal even if it is agreed by both sides of contract?

A: It is not illegal in such a case, and the illegality concerning interest loans applies to consumption loans; the tradition quoted in the question is a general tradition quoted from the Holy Prophet and there is no general rule to indicate the illegality of interest for all people and in all cases.

Q1103: Is it permissible to impose the condition while loaning someone that they should loan you in return?

A: It is permissible, and is not considered as a case of usury.

Q1104: A businessman has purchased 500,000 Rupees worth of carpets and other goods, and sold them on credit to get paid eight months later. Then he has learned that he will come to financial harm if he waits for the payments until the due date. Is he allowed to borrow someone that sum of money and pay interest on it?

A: The illegality of consumption interest loans remains there and one is not allowed to use such loans due to economic and financial problems and losses.

Q1105: I was a government official in Turkey for two years and I had a deposit in Bank Mellat (Ankara Branch) on which some interest was paid. Regarding the fact that Bank Mellat gives these deposits as interest loans to other banks in Muslim and non-Muslim countries, is such interest legal and permissible?

A: Regarding the fact that banks do not come to any economic and financial harm through payment of such interests, and that these payments of interest do not lead to their bankruptcy, and that both sides benefit from such loans, the contracts are considered as reasonable, and the interests are not deemed illegal; and there is no difference between Islamic and non-Islamic banks in this regard.