Fiqh

MUAMILAAT -> Interest

TRANSACTIONS BASED ON RIBA OR INTEREST
- 1. Gold and silver, and items that are made from them.
  2. Items other than gold and silver that are sold by weight, such as dry groceries, crops, steel, copper, wool, vegetables, etc.
  3. Items that are sold by measurement, such as fabrics.
  4. Items that are sold by counting, such as eggs, mangoes, guavas, oranges, goats, cattle, horses, etc.
GOLD AND SILVER
- 1. There are several ways of purchasing gold and silver. One is that gold could be purchased in exchange for gold or silver in exchange for silver, e.g. a person purchases gold with a gold coin which he has in his possession or silver with a silver coin which he has in his possession. In other words, the item that is being purchased is of the same category as that with which it is being purchased. In such a case, two factors are wajib: (i) the gold or the silver on both sides will have to be equal, (ii) the transaction must be complete before the buyer and the seller can separate, there must be no outstanding amount. If they conduct this transaction contrary to any of these two factors, it will be interest. For example, if you purchase silver with a R1 coin (which is made of silver), you will have to purchase the silver that is equal in weight as that of the R1 coin. If it is more or less than the R1 coin, it will be interest. Similarly, if you hand over the R1 coin and he does not give you the silver immediately, instead he promises to give it to you after a short while and goes away or, you do not hand over the R1 coin to him and instead you take the silver on credit, then this will also be interest.
  2. The second method is that the same category is not found on both sides. Instead, one person has gold while the other has silver. The rule in this regard is that it is not necessary for them to be equal in weight. It is permissible to purchase as much gold as possible with a R1 coin. Similarly, it is permissible to purchase as much silver as possible with a gold coin. However, this transaction will have to be completed before the two can separate. In this case it is also wajib to abstain from any credit, as mentioned in the previous mas'ala.
  3. The market value of silver has risen sharply. In other words, a Rs. 1 coin is selling for Rs. 1.20 and no one is giving it for Rs. 1. Alternatively, a piece of silver jewellery has been exquisitely designed and its weight is equal to 10 Rs. 1 coins of silver. However, one cannot purchase it for less than the weight of 12 Rs.1 coins of silver. In order to save yourself from interest, an alternative method is that you should not purchase it with silver coins. Instead, purchase it with money (notes) or normal ordinary coins. However, you should not purchase the Rs. 1 coin with Rs. 1.20. If you do so, it will be interest. Similarly, if you wish to purchase Rs. 8 worth of silver for Rs. 9, pay the person with Rs. 7 worth of silver and Rs. 2 in cash. In so doing, you will be purchasing Rs. 7 worth of silver with Rs. 7 worth of silver, and the balance of the silver will actually be paid for with your Rs. 2. In short, if you wish to purchase silver with silver always tender less silver than what is actually being purchased and the remainder should be paid in cash (notes or coins).
  4. If both the buyer and seller agree, then an easy method will be to add some money on that side where the silver is less in weight.
  5. An easier method is that each of them should keep whatever silver he wishes to keep, and the other should keep whatever silver coins he wishes to keep. However, each one should also add some money to his silver or silver coins. He should then say: "I am buying this silver and this money in exchange for these silver coins and this money." In so doing, they will save themselves from all technicalities.
  6. If the price of silver has dropped and one is able to purchase R1.50 worth of silver for R1 (made of silver) and one feels that if he purchased R1 worth of silver for R1, he will suffer a loss, then the method of avoiding this and also avoiding any interest is that he should include some money (not made of silver) in the price of the silver irrespective of how little it may be, e.g. he purchased R15 worth of silver for R10. In this way, it would be understood that the silver worth R9 was in exchange of the nine silver coins of R1 each whilst the cash (i.e. other coins not made of silver) of R1 was in exchange of the remainder.
  7. A person wishes to purchase high quality silver in exchange for his inferior quality silver and is unable to acquire an amount of high quality silver which is equal in weight to his inferior quality silver. In such a case, he should first sell his inferior quality silver for whatever price he may be able to get. Thereafter, he should purchase the high quality silver with the money that he receives. In buying and selling, the rules that have been mentioned above should also be borne in mind. Alternatively, both the buyer and seller could include some money in both the silver and thereafter undertake the transaction.
  8. Most women purchase silver laces, brocades, tassels, etc. from the bazaars. They should also bear the above masa'il in mind because this is also silver and silver coins are being paid in exchange for these silver items. Even in this case, an easy method will be to include some money on either side and then undertake the transaction.
  9. If a person purchases an item which is made of gold or silver and it is such that it is entirely made of gold or entirely made of silver and it does not contain anything else, then the same rule will apply. That is, if a gold item is being purchased with silver or silver coins, or a silver item is being purchased with gold coins, it will be permissible to purchase that item irrespective of the difference in weight. The only factor that they have to worry about is that the transaction must be completed there and then. None of the parties must have any outstanding amount. But if a silver item is being purchased with silver coins or a gold item is being purchased with gold coins, it will be wajib for them to be equal in weight. If there is any shortfall or extra on either side, the item should be purchased through the above-mentioned methods.
  10. The item is such that it has some other metal or stone in addition to the silver. For example, an armlet has been filled with sealing-wax, a stone has been set onto a nose-ring, a stone has been set into a ring, or an armlet has not been filled with sealing-wax but instead it has been beaded with strands of wire (and beads). If these items have been purchased with silver coins, then check the amount of silver they contain. Is the silver in the item which you have purchased equal in weight as that of the silver coins, is it more or is it less? If the silver in the item is definitely less than the weight of your silver coins, this transaction is permissible. If it is equal or more, the transaction will be regarded as interest. In order to save yourself from this interest, the above-mentioned methods should be employed. That is, the silver coins with which you will be paying should be less in value than the silver that the item contains and include some cash in order to fill in the balance. The condition or prerequisite of the entire transaction being carried out at one time (i.e. without any credit on either side) has also to be adhered to in all these masa'il.
  11. You have taken someone else's ring in exchange for your ring. Check if both have any stone or gem. If both the rings have a stone or gem, this exchange is permissible irrespective of whether the amount of silver in both the rings is equal, less or more. However, it is necessary that this exchange takes place in one sitting.
    
    If both the rings are plain, i.e. without any stone, then the condition is that the silver will have to be equal. Even if there is a slight difference, it will be regarded as interest.
    
    If one of the rings are plain and the other has a stone, it will be permissible to exchange one for the other only if the plain ring has more silver than the ring which has a stone. If it is not so, it will be haram to exchange and it will be regarded as interest.
    
    Similarly, if this transaction and exchange does not take place at once; i.e. one of them hands over his ring immediately while the other says that he will give it at a later stage, then this will also be regarded as interest.
  12. In all those masa'il where we said that it is a condition or a prerequisite for the transaction to be executed in one sitting or at one time - this means that the transaction must be completed before the two can separate. If one of them separates or moves away before the transaction can be completed, it will not be considered and this will also be regarded as interest. For example, you purchase some gold, silver, or a gold and silver item from the jeweller in exchange for R10 worth of silver. In such a case, you should hand over the silver coins there and then. In the same way, the jeweller should hand over the item to you there and then. If the jeweller does not have the silver with him and says that he will go home just now and send the silver item to you, this will not be permissible. Instead, he should send someone to bring it for him. At the same time, you should not move from that place until the silver item is brought nor should you allow the jeweller to move away from there. If the jeweller asks you to go home with him and that he will give it to you over there, you should follow him closely and try to be with him all the time. If he disappears into the house or disappears somewhere else, it will be a sin and the transaction will not be permissible. You will have to renew the entire transaction.
  13. After purchasing the item, you went home to bring the silver coins, or the jeweller went to relieve himself or went into the back of his shop for some work. In so doing the two of you were separated from each other. This is not permissible and the transaction will be regarded as interest.
  14. If you do not have the silver coins with you at that time and you wish to purchase the item on credit, then the method of purchasing the item is that whatever amount you have to pay for the item, borrow that amount from the person as a loan. Once you have taken that amount, pay for the item that you wish to purchase, and the responsibility to re-pay the loan will remain on your shoulders. You can re-pay this loan whenever you wish.
  15. You purchased a head-covering or hat which has been embroidered with silver at a price of R10 worth of silver. In such a case, try to estimate the amount of silver that will come out from that head-covering. After estimating the amount of silver, it will be wajib on you to pay an equivalent amount from your silver coins immediately. The balance of the price could be paid whenever you wish. The same rule will apply to pre-set jewellery. For example, you purchased jewellery to the value of R50 in silver while it has R20 worth of silver in it. In such a case, you will have to pay the R20 immediately, and the balance could be paid whenever you wish.
  16. You purchased cash money in exchange for silver coins. The rule in this regard is that it is not necessary for the transaction to be executed immediately. Instead, it will be sufficient if it is fulfilled by one of the parties. For example, you gave the silver immediately while he gave the cash money after some time. Alternatively, he gave you the cash money immediately, while you gave him the silver after separating from him. This is permissible. However, if you take small change (coins in small denominations) together with the cash money, this small change will have to be given there and then.
    
    However, it should be borne in mind that this rule with regard to cash will only be applicable when the shop-keeper has the cash money in his possession but is unable to hand it over immediately due to some reason, or because it is still at home and he will bring it for you from there. But if he did not have the money in his possession and said that he will give it to you after selling some of his goods or, he gave you a part of the money now and said that when he makes a sale and receives some money you must come and take the balance of what he owes you; this will not be permissible. Since most of these debts take place on account of an absence of money, it is therefore preferable not to leave any money on credit. If it becomes necessary to undertake such a transaction, take whatever money the person has as a loan and let him keep the R1 (silver coin) as an amanah. Once he gives you all the money undertake the transaction.
  17. If a person gives gold coins in exchange for silver coins, it is wajib for both of them to be present and for the transaction to be carried out in the presence of the buyer and seller.
  18. A person purchased a gold or silver item with gold or silver coins and made the condition that he has the right to keep the item or return it within one day or three days. This is not permissible. One should not make conditions of this nature in such transactions.
ITEMS SOLD BY WEIGHT
- 1. We will now explain the rules with regard to items sold by weight, such as dry groceries, meat, steel, copper, vegetables, salt, etc. If a person wishes to exchange or purchase any of the above-mentioned items (or items that fall under this category) in exchange for the same item, e.g. he wishes to exchange wheat in return for wheat, rice in exchange for rice, flour in exchange for flour or any other similar item which is the same, then the rule in this regard is that it is wajib to take the following two factors into consideration: (i) the weight of the item will have to be equal on both sides. Even the slightest difference in weight will not be permitted. If not, it will be regarded as interest. (ii) If the two parties do not take possession of the respective items, the minimum requirement is that the wheat of both should be kept separately. You should take your wheat, weigh it, keep it separately and tell him that this wheat is kept over here, he can take it whenever he wishes. In the same way, he should also weigh his wheat, keep it separately and tell him that this wheat is kept over here and that you can take it whenever you wish. If they do not do this and separate from each other (or go away), they will be committing the sin of interest.
  2. A person wishes to give his inferior quality wheat in exchange for wheat that is of a high quality, or inferior quality flour in exchange for flour that is of a high quality. When engaging in exchanges of this nature, it is obvious that no one would give an equal amount. In order to save oneself from interest, one should sell this inferior quality wheat or flour in exchange for money. For example, by selling a certain amount of flour for R2. Thereafter, he should purchase the high quality flour (or wheat) with the R2 that he received. This is permissible.
  3. If an item is being exchanged for another item, e.g. a person gives some wheat and takes rice, barley, gram, corn, salt, meat, vegetables, etc., then in such a case it is not wajib for the weight of both the items to be exactly the same. He can give a kilo of wheat in exchange for 10 kilos of rice or any other item. He could also give a kilo of wheat in exchange for a fraction of a kilo of any other item.
    
    However, the second factor is wajib here as well. That is, the transaction must be executed in the presence of both the persons. Alternatively, the minimum is that the items of both the persons must be kept separately. If they do not do this, they will be committing the sin of interest.
  4. A woman purchased vegetables from the hawker in exchange for a kilo of gram. She then separated herself from there and went into the house to bring some wheat. This is haram and not permissible. She will have to recommence the entire transaction.
  5. Items which are sold by weight were purchased with silver coins, money, clothes, or any other item which is not sold by weight but sold by measurement or by counting. For example, the person gave a metre of material and took some wheat or similar item (which is sold in weight) in exchange. Alternatively, he gave some wheat or gram and took some guavas, oranges, pears, eggs, or any other item that is sold by counting. In short, on one side we have an item that is sold by weight, and the other side we have an item that is sold by counting or measuring. In such a case, none of the two factors which we had mentioned will be wajib. For R1, a person can purchase as much wheat, flour, or vegetables as he wishes. Similarly, he can give some clothes and take as much dry groceries as he wishes. By giving some wheat, gram, etc. he can take as much guavas, oranges, etc. as he wishes. All this is possible irrespective of whether the entire transaction is executed in one sitting or whether it is completed after them separating. In all cases this transaction will be correct.
  6. On one side there is sifted flour while on the other side there is un-sifted flour. Alternatively, on one side there is course flour while on the other side there is fine flour. When exchanging such flour, it will be wajib for them to be equal in weight. It is not permissible to have any difference in the weight. If it becomes necessary to exchange it in this way, the above-mentioned methods should be adopted.
    
    If on one side you have wheat flour and on the other side you have gram flour or rice flour, then in such a case it will not be wajib to have an equal weight of both. However, the second factor, i.e. that the transaction must be executed in one sitting, is wajib.
  7. In no way is it permissible to exchange wheat for flour. This is irrespective of whether you give a kilo of wheat in exchange for a kilo of flour, or whether there is any difference in their weight. In all cases it is not permissible. However, if the person gives some wheat and does not take any wheat flour, instead he takes the flour of some other item such a gram flour, it will be permissible to do so. However, the transaction will have to be executed there and then.
  8. A person gave mustard seeds and took mustard oil in return or he gave sesame seeds in exchange for sesame oil. In such a case you should check whether this oil is definitely more than the oil that can be extracted from these mustard or sesame seeds or not. If this oil is more, it will be permissible to undertake such a transaction provided it is executed there and then. If it is equal to or less, or you have a doubt as to whether it is more or not, it will not be permissible. Instead it will be regarded as interest.
  9. A person gave beef in exchange for mutton. It is not wajib for the weight of both to be the same. There can be a difference in the weight. However, the transaction will have to be executed there and then.
  10. A woman gave her water pitcher and took another one in exchange. Alternatively, she exchanged her water pitcher for a small pot or pan. In such a case it is a condition for both the items to be equal in weight and for the transaction to be executed there and then. If there is a slight difference in the weight, it will be interest. This is because both the items are made of copper and they will therefore be regarded as being of the same category. If they are equal in weight but the transaction was not executed there and then, it will also be interest. However, if one item is made of copper and the other of steel, brass or any other metal, it will be permissible to have some difference in weight. However, the transaction will have to be executed there and then.
  11. A woman purchases a kilo of wheat on credit from a person and says: "I don't have any wheat. However, in compensation for your wheat I will give you two kilos of gram." This is not permissible because it means that the woman is exchanging her gram for wheat and at the time of exchanging it is necessary to have the entire transaction to be executed there and then. There must be no credit remaining. However, if the need arises to carry out such a transaction, she should take the wheat on credit but she should not mention that she will give two kilos of gram in exchange for it. Instead, after some time she should bring the gram and inform the person thus: "I am giving you this gram in exchange for the wheat that I had taken from you." This is permissible.
  12. In all the above-mentioned masa'il it is a prerequisite for the entire transaction to be executed there and then. If this is not done, then the minimum is that both the items should be weighed there and then and kept separately. If this is not done, the transaction will be regarded as interest.
ITEMS SOLD BY MEASUREMENT OT COUNTING
- 1. The following rules apply to items that are not sold by weight, but sold either by measurement or counting. If a particular type of item is exchanged for the same type of item, e.g. guavas are exchanged for guavas, or oranges are exchanged for oranges, or a fabric is exchanged for similar fabric, then in all these cases it is not a prerequisite for both the items to be equal. It is permissible to have some difference. However, it is wajib for the transaction to be executed there and then.
    
    If the item that is being exchanged is different from the other item, e.g. guavas are exchanged for oranges, wheat is exchanged for guavas or a fine fabric is exchanged for a coarse fabric, this will be permissible under all circumstances. It is not wajib for both the items to be equal nor is it wajib to execute the transaction there and then (i.e. it is permissible to take, for example, the guavas now and give the oranges later on).