Jump to content
Guests can now reply in ALL forum topics (No registration required!) ×
Guests can now reply in ALL forum topics (No registration required!)
In the Name of God بسم الله

The Islamic Dilemma On Bank Interest Payment?


Recommended Posts

The alternative is that no one should experience foreclosure. This is only possible in a system of Public Credit.

 

How? 

That's why I said it isn't practical... and the whole thing of you owning 20 I owning 80 is just an idea written on a paper which you read and feel inner peace........ in the eyes of the government or the land department the property is owned by bank. But if you're asking what would be a proper Islamic mortgage settlement then we go back to the previous argument of money value decreasing over time which requires that extra money be charged whether in the form of interest or rent or anything else, otherwise the bank will suffer loss. So, with paper money we can't have a truly Islamic bank run successfully or make profits for providing services. If we set up such a bank it will fail.

 

Would you support a more stable currency then, such as gold? 

Link to post
Share on other sites
  • Replies 146
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Popular Posts

It starts off with, "I need a loan because I need somewhere to live", then "I need a loan to buy an investment property because i need to have something that will pay my pension", then "I need a loan

What risk? Commercial banks simply type a number in their computer and create money electronically from thin air. The equity they are dependant on in order to remain solvent are public sweat and blood

Yes it is problematic. "Islamic Banking" just renames interest as fees. What do you propose as a solution? As I see it, having a community which help each other and not try to consume each other woul

Posted Images

And diyaa110, you reminded me of a discussion I was having about currency devaluation (due to over-supply) with a friend recently. He had an idea that I thought was genius, which we briefly went close to on this thread but missed. 

 

It is that loans should be made in terms of stable currencies (ex gold) or actual goods (such as a certain amount of food, oil, etc). When the loan is drafted, the amount needed in paper currencies is converted into gold or other goods, and made note of. And when it comes to paying the loan back, whatever those goods cost at the time is what is paid back. 

 

This system would be fairer to both parties as it would mean they get back the same amount of wealth being given out and returned (thus eliminating interest and helping average people), while satisfying banks' need for wealth preservation. What are your thoughts? 

Link to post
Share on other sites
  • Advanced Member

You're telling people essentially not to do anything financial until the world is sufficiently reshaped. Finance is part of buying basic items and growing business. You have no answer for them other than "no."

The thing is though, this is something that can be implemented overnight. The plan has already been produced by draft legislation, detailing all the steps necessary, here:

http://www.positivemoney.org/our-proposals/draft-legislation/

Link to post
Share on other sites
  • Advanced Member

The thing is though, this is something that can be implemented overnight. The plan has already been produced by draft legislation, detailing all the steps necessary, here:

http://www.positivemoney.org/our-proposals/draft-legislation/

 

You're still fluttering off in the land of hypothetical. Is it law or policy? No.

Is it imminently going to be? No.

Is it being discussed in legislatures? No.

Is it being seriously considered for discussion? Has it been proposed as a policy? No.

Is there a meaningful lobby for it to be considered as so, aside from this dude making a website? No.

 

In the meantime, the world keeps turning, life continues.

Edited by kadhim
Link to post
Share on other sites
  • Advanced Member

And diyaa110, you reminded me of a discussion I was having about currency devaluation (due to over-supply) with a friend recently. He had an idea that I thought was genius, which we briefly went close to on this thread but missed. 

 

It is that loans should be made in terms of stable currencies (ex gold) or actual goods (such as a certain amount of food, oil, etc). When the loan is drafted, the amount needed in paper currencies is converted into gold or other goods, and made note of. And when it comes to paying the loan back, whatever those goods cost at the time is what is paid back. 

 

This system would be fairer to both parties as it would mean they get back the same amount of wealth being given out and returned (thus eliminating interest and helping average people), while satisfying banks' need for wealth preservation. What are your thoughts? 

 

:) Hmmm... if only banks wanted 'the same amount of wealth'. Banks want profits! Simple. Lending someone a bar of gold or a barrel of oil or a dozen goats or a ton of rice or an acre of land without demanding any additional thing back on top of it means sacrifice. An act of kindness. A risk, an uncertainity. And banks don't do that. 
 
On the other hand, lending someone a sum of 'paper money' without asking for more in return means charity. Voluntarily giving away a portion of your wealth or agreeing to suffer the loss. And banks never ever do that.
 
We're knocking on the wrong doors here. A loan without interest is the work of social and charitable organizations or the job of government's treasury department. Banks are there to do business and you can't ask a businessman to agree to freeze his money or incur loss.
 
So what will be ISLAMIC Mortgage Scheme ? more like this...
 
[Yusufali 2:276] Allah will deprive usury of all blessing, but will give increase for deeds of charity...
 
[Yusufali 2:280] If the debtor is in a difficulty, grant him time till it is easy for him to repay. But if ye remit it by way of charity, that is best for you if ye only knew.
 
[Yusufali 3:130] O ye who believe! Devour not usury, doubled and multiplied; but fear Allah; that ye may (really) prosper.
 
[Yusufali 30:39] That which ye lay out for increase through the property of (other) people, will have no increase with Allah: but that which ye lay out for charity, seeking the Countenance of Allah, (will increase): it is these who will get a recompense multiplied.
 
[Yusufali 2:245] Who is he that will loan to Allah a beautiful loan, which Allah will double unto his credit and multiply many times? It is Allah that giveth (you) Want or plenty, and to Him shall be your return.
Edited by diyaa110
Link to post
Share on other sites
  • Advanced Member

The thing is though, this is something that can be implemented overnight. The plan has already been produced by draft legislation, detailing all the steps necessary, here:

http://www.positivemoney.org/our-proposals/draft-legislation/

 

I haven't read it, but even if its a good theory it would mean standing against the lords of the world... wouldn't it ? Like other major issues which have solutions but they sit inside books which have dust upon them while the powerful continue to devise more methods of exploiting the weak.

Link to post
Share on other sites

 

:) Hmmm... if only banks wanted 'the same amount of wealth'. Banks want profits! Simple. Lending someone a bar of gold or a barrel of oil or a dozen goats or a ton of rice or an acre of land without demanding any additional thing back on top of it means sacrifice. An act of kindness. A risk, an uncertainity. And banks don't do that. 
 
On the other hand, lending someone a sum of 'paper money' without asking for more in return means charity. Voluntarily giving away a portion of your wealth or agreeing to suffer the loss. And banks never ever do that.
 
We're knocking on the wrong doors here. A loan without interest is the work of social and charitable organizations or the job of government's treasury department. Banks are there to do business and you can't ask a businessman to agree to freeze his money or incur loss.

 

True, and your post makes a lot of sense, we need to think and reach what the ideal world looks like in our minds. I think the above is possible if banks worked as non-profits, right? They could charge nominal (fixed) fee to cover administrative charges. The thing that would be missing though in that case is innovation, competition and different banks vying for your business with better products. How do we preserve these positive aspects of a market while removing the negatives? There has to be a better answer than tons of regulations. 

Link to post
Share on other sites
  • Advanced Member

If and only if they are non-profit and if they are they wouldn't care for innovation and competition because their biggest positive aspect would be their being non-profit but any ways... banks do other things too like safekeeping, trade and investment, etc. they can always compete in those departments.

Link to post
Share on other sites
  • Advanced Member

You're still fluttering off in the land of hypothetical. Is it law or policy? No.

Is it imminently going to be? No.

Is it being discussed in legislatures? No.

Is it being seriously considered for discussion? Has it been proposed as a policy? No.

Is there a meaningful lobby for it to be considered as so, aside from this dude making a website? No.

This "dude" goes by the name of Ben Dyson, who is the founder of the think tank Positive Money in the UK. He has thoroughly explicated the Sovereign Money proposal in a book he published last year titled Modernising Money after years of research, and has plenty of material on his website made accessible for everyone. It has already gained public support from the Green Party and a few Labour Party MPs. The Positive Money campaign is making a concerted effort to spread the word, traversing the country, generating awareness about the monied elite monopoly over the nation's currency, laying bare the facts to illustrate how this system is evidently against the public interest.

Again, I'm seriously struggling to make out what your point of contention is. That it's impossible? Is that what you're implying? Why?

 

In the meantime, the world keeps turning, life continues.

Wonderful insight, kadhim. Such profundity. Any reason why you haven't indicated any flaw with the proposal?

post-172798-0-25406900-1411851040_thumb.

Link to post
Share on other sites
  • Advanced Member

So what's your best case? Let's ignore for a moment that England is one country out of 180, and that the nation with London, the global center of parasitic finance, is probably the last place you'd actually see financial reform appear. So, best case, it moves, and takes? 5 years? 10 years? 20?

 

What do average people do in the meantime? I've asked the question 3 or 4 times now and you keep dodging it. What do people do? Your answer is to swear off finance and borrowing until the world is fully remade? They don't buy that car? That house? Don't build or expand that business?

Link to post
Share on other sites
  • Advanced Member

What do average people do in the meantime? I've asked the question 3 or 4 times now and you keep dodging it. What do people do? Your answer is to swear off finance and borrowing until the world is fully remade? They don't buy that car? That house? Don't build or expand that business?

What makes you think that the transition period would put to a grinding halt all financial services? Though I'm still in the process of properly reading the proposals set out, I see no reason why the administrative details of the transition would be a potential setback for the plan; especially since it works around existing institutions.

Care to explain?

Link to post
Share on other sites
  • Advanced Member

What makes you think that the transition period would put to a grinding halt all financial services? Though I'm still in the process of properly reading the proposals set out, I see no reason why the administrative details of the transition would be a potential setback for the plan; especially since it works around existing institutions.

Care to explain?

 

What the heck? Pay attention. What "transition period?" This plan is not even going to be something considered for a long time, forget about it happening. I'm talking about NOW. Your dream system DOES NOT EXIST today and will not for decades probably. What are people supposed to do now and until then? 

Link to post
Share on other sites
  • Advanced Member

What the heck? Pay attention. What "transition period?" This plan is not even going to be something considered for a long time, forget about it happening. I'm talking about NOW. Your dream system DOES NOT EXIST today and will not for decades probably. What are people supposed to do now and until then?

First of all, stop shouting aggressively. Calm yourself. You sound unhinged.

Second, I'm perplexed by your weird fixation with the "present." The entire purpose of this thread is to discuss a practical proposal that can be readily implemented; the structural obstacles and length of time involved are a separate matter altogether, requiring another thread.

Third, your question "what are people supposed to do now and until then?" is entirely void of any context. I suppose we can join the campaign and spread the word to as many people as possible in the meantime? Approach important officials and persuade? What are you alluding to exactly?

Link to post
Share on other sites
  • Advanced Member

I already explained the context several times. Credit. Where should people access credit? What don't you understand?

Let's spell it out again.

You're saying people shouldn't take bank loans.

What's the alternative, you're asked? Rewriting the entire global finance system, you say.

Well, that's not happening anytime soon. What do people do in the meantime to buy cars, houses, build their businesses, etc?

Stop stalling and answer the question please.

Link to post
Share on other sites
  • Advanced Member

I already explained the context several times. Credit. Where should people access credit? What don't you understand?

Let's spell it out again.

You're saying people shouldn't take bank loans.

What's the alternative, you're asked? Rewriting the entire global finance system, you say.

Well, that's not happening anytime soon. What do people do in the meantime to buy cars, houses, build their businesses, etc?

Stop stalling and answer the question please.

 

It's possible to live without doing something haram!

It could be hard, but it's possible.

It's possible to live outside this ill credit system.

Link to post
Share on other sites
  • Advanced Member

It's possible to live without doing something haram!

It could be hard, but it's possible.

It's possible to live outside this ill credit system.

 

It's not clear it is haram, especially given the teachings of our scholars.

 

It's possible to do a lot of things. Possible to be celibate for life, or vegan. Doesn't mean it's a rule for everybody because some can do something.

Link to post
Share on other sites
  • Advanced Member

Stop stalling and answer the question please.

I'm not stalling or avoiding anything. It's just that you didn't clarify that the "people" you were referring to are "Muslims," rather than people in general.

There's a pertinent reason as to why this thread is titled "the Islamic dilemma." A believer lands immediately into a catch 22 when he comes to the realisation that any amount of interest is forbidden, and ends up trying to piece together an unsolvable jigsaw puzzle.

The discovery of reserving a fraction of deposits to make loans with interest attached was a consequence of avarice and a short-term mentality, a lower quality of human nature. Despite the discovery having turned into a full-fledged business centuries after the advent of revelation, there was no excuse for either the final Imam or God not to intervene to prevent its inherent corruption from inevitably being all pervasive and plaguing every society. It was a lack of divine intervention which gave it an air of legitimacy and vindicated itself of being a systemic cause of economic problems.

At this point in time, a believer has to come to terms with the fact that the verses that denounce the usage of interest are not abrogated, and that they remain eternal.

If the following proposition: "God will forgive those who engage in interest because it is beyond their control" is maintained to be true, then it would have to be admitted that the divine prohibition of interest was overcome by the random impulse of hapless events over time, forcing it into cultural legalisation and acceptance for the longest time. It can't be considered a mere "exception," because it is not analogous to being stranded and lost on a desert island with only a roasted pig to consume for the sake of survival.

Tell me, how am I meant to take seriously a religion that has no consonance with reality?

Link to post
Share on other sites
  • Advanced Member

"My extremist beliefs leave me with no practical solutions to offer."

What part is extremist? Your ostensibly "practical" solution would be in violation of the belief your profess. A fine illustration of cognitive dissonance at play.

Interest is an extraction of wealth from real productive activity, no matter the amount. Hence why religion forbade it. It's unfortunate that a basic fact doesn't impel you to reconsider your stance.

Link to post
Share on other sites
  • Moderators

What's the alternative, you're asked? Rewriting the entire global finance system, you say.

Well, that's not happening anytime soon. What do people do in the meantime to buy cars, houses, build their businesses, etc

How about people actually help each other?

You know, the whole universal "do unto others" principle that runs across almost every if not every Religion.

That would solve everything.

Link to post
Share on other sites
  • Advanced Member

How about people actually help each other?

You know, the whole universal "do unto others" principle that runs across almost every if not every Religion.

That would solve everything.

 

Cool. I'll start looking for good listings; you be ready to transfer the money. $300 000 should do it. Thanks again for volunteering.

Edited by kadhim
Link to post
Share on other sites
  • Moderators

Cool. I'll start looking for good listings; you be ready to transfer the money. $300 000 should do it.

Ha! If I had $5 I'd be happy to lend it to you interest free. But if you need a civil engineer to consult on a project, I'm always willing to work pro bono for a cause I believe in.

Each using their own strengths, we can be more able and more powerful together than the sum of each alone. Rather than waiting for someone rich or "powerful" to change the world, we can just each start changing our own worlds.

$300 000 should do it.

And what in the world do you NEED for $300k? If you're considering purchases of that size, maybe you ought to be the one funding others!

Link to post
Share on other sites
  • Advanced Member

Ha! If I had $5 I'd be happy to lend it to you interest free. But if you need a civil engineer to consult on a project, I'm always willing to work pro bono for a cause I believe in.

Each using their own strengths, we can be more able and more powerful together than the sum of each alone. Rather than waiting for someone rich or "powerful" to change the world, we can just each start changing our own worlds.

And what in the world do you NEED for $300k? If you're considering purchases of that size, maybe you ought to be the one funding others!

 

That's the lower end basic cost of clean, safe housing in the modern urban first world.

Link to post
Share on other sites
  • Moderators

That's the lower end basic cost of clean, safe housing in the modern urban first world.

Uh, no it isn't. My house was $80k, 1300 sf, 3 bedroom, 2 full bath, clean, comfortable, and safe, even with very nice neighbors, on the bus route, and shopping within walking distance. Front porch, lawn, garage for outdoor storage, driveway, community playground a few hundred yards away. It was more than basic.

Damn rich arrogant elitists! "Needing" to borrow money to pay for luxury, yet probably never would make even a pbj for a hungry stranger!

Edited by notme
Link to post
Share on other sites
  • Advanced Member

Uh, no it isn't. My house was $80k, 1300 sf, 3 bedroom, 2 full bath, clean, comfortable, and safe, even with very nice neighbors, on the bus route, and shopping within walking distance. Front porch, lawn, garage for outdoor storage, driveway, community playground a few hundred yards away. It was more than basic.

Damn rich arrogant elitists! "Needing" to borrow money to pay for luxury, yet probably never would make even a pbj for a hungry stranger!

 

:wacko:  :rolleyes:

Must have taken you awhile to track down that many cardboard boxes, I imagine.

 

Yeah, man. Sure. You can totally buy a family place for 80k in urban Canada.  :rolleyes: 300k is a gold plated palace. 

 

Although, looks like I was off by a bit. (That's what you get when you're not actively in the market)

Seems $250 000 is actually the ground floor for Montreal family dwellings. 

 

http://www.royallepage.ca/en/property/quebec/pierrefonds-roxboro-montreal/4-5e-avenue-s/2430339/mls15120076/#.VCzH0fldWKI

 

 

My bad. 

 

So if you can just wire that to my account, I can make an offer. Tell you what, as a token of gratitude, I'll even make you one of my classic toasted salmon filet sandwiches with dijon mustard and balsamic mayo.

Edited by kadhim
Link to post
Share on other sites
  • Moderators

:wacko: :rolleyes:

Must have taken you awhile to track down that many cardboard boxes, I imagine.

As I said:

Damn rich arrogant elitists! "Needing" to borrow money to pay for luxury, yet probably never would make even a pbj for a hungry stranger!

I suppose for you and your type "basic" includes a golf course on-site, pool, clubhouse. I've designed plenty of those cookie cutter subdivisions for those people who "deserve" it. Ain't no way I'd ever live in one even if I could afford it. I wouldn't be able to stand the neighbors.

As for me and my family, we don't need a golf course or 3000 square feet. We have each other, food, shelter, and Allah. And wherever we can, we DO help people, with our skills or with our money, family or stranger, Muslim or non-muslim. But I'm sure your luxurious house on a golf course will be very comforting to you on the day of judgement.

Can you explain to me why you are opposed to helping each other?

Link to post
Share on other sites
  • Moderators

Can you explain to me your fondness for non sequiturs?

In my post at the top of this page (sorry, mobile site doesn't display post number), I suggested that instead of borrowing from banks we help each other, kind of like a community. You replied sarcastically, as if you thought it a ridiculous suggestion. How is my question non sequitur?

I'm just trying to return to the topic. The issue isn't how much houses cost, but whether interest is haram. As I understand it, interest is haram except in cases of dire necessity. What one person considers necessary another might not. So I simply suggested a feasible alternative to borrowing from banks.

I'll admit to being idealist. I expect a lot from humanity, especially Shia Muslims. That's not a bad thing.

Edit: Maybe Canada is a lot more expensive than United States. To be honest, I'm not so sure US is "first world" anymore.

Edited by notme
Link to post
Share on other sites
  • Advanced Member

In my post at the top of this page (sorry, mobile site doesn't display post number), I suggested that instead of borrowing from banks we help each other, kind of like a community. You replied sarcastically, as if you thought it a ridiculous suggestion. How is my question non sequitur?

I'm just trying to return to the topic. The issue isn't how much houses cost, but whether interest is haram. As I understand it, interest is haram except in cases of dire necessity. What one person considers necessary another might not. So I simply suggested a feasible alternative to borrowing from banks.

I'll admit to being idealist. I expect a lot from humanity, especially Shia Muslims. That's not a bad thing.

 

You said people should help each other in the context of a discussion of credit. I took you seriosuly on that and asked you for help. 

You responded with lies and insults. 

 

So, anyway, are you going to put your money where your mouth is or not? I'd like to make an offer on the humble family home I linked to above.

 

Edit: Maybe Canada is a lot more expensive than United States. To be honest, I'm not so sure US is "first world" anymore.

 

 

I specified "urban" above. Suburban is only marginally better, unless you're open to 2+ hours of commute per day. Which is its own cost. Rural one can probably get 2-3 times as much per dollar. But then there's finding a job that is the problem. $250k is a bungalow, if you're lucky, near Canadian urban centers. The US may well be less in the Midwest or in red-lined neighborhoods. 

Edited by kadhim
Link to post
Share on other sites
  • Moderators

You said people should help each other in the context of a discussion of credit. I took you seriosuly on that and asked you for help.

You responded with lies and insults.

So, anyway, are you going to put your money where your mouth is or not? I'd like to make an offer on the humble family home I linked to above.

I did not lie. I humbly apologize for the insults. I'm fighting a deeply rooted prejudice against rich people.

As I said before, if I had money I would lend it. I'm a currently unemployed engineer. The "recession" set me back a bit, gave me lots of first hand knowledge of what it's like to be enslaved by debt. I was on my way up until I accepted a job working for an unethical employer. Now I'm broke again. But am I the only person who thinks we should help each other rather than relying on banks, government, and other anonymous entities?

Link to post
Share on other sites
  • Advanced Member

Alright. That's fine. Hopefully it's clear I wasn't seriously asking a stranger on the internet for that kind of money. I'll get there myself, in time, hopefully. 

 

Sure, people should help each other. But it's going to take a mountain of work before that's an alternative to dealing with banks for education and housing. I mentioned cars before, but I'll withdraw that since it's something you can legitimately and reasonably save for and buy with cash. (Speaking as the owner of a $1500 2001 Chevy, lol) Quality housing is a tougher nut to crack, unless as a community we get organized to vertically coordinate the whole operation from materials to buying land to building to finance.

 

Best of luck with the work business. It's pretty nasty out there still, for the 99.5%. 

Keep the faith.

Edited by kadhim
Link to post
Share on other sites
  • Advanced Member

Quality housing is a tougher nut to crack, unless as a community we get organized to vertically coordinate the whole operation from materials to buying land to building to finance.

To quote a wise gentleman:

"What the heck? Pay attention. This plan is not even going to be something considered for a long time, forget about it happening. I'm talking about NOW. Your dream system DOES NOT EXIST today and will not for decades probably. What are people supposed to do now and until then?"

You were criticising me for being hopelessly idealistic, and yet your alternative is just as hopelessly idealistic, arguably even more so.

Listen. Just be honest. Admit that you have no choice but to violate an aspect of your belief system. I would appreciate the integrity at least.

Link to post
Share on other sites

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


×
×
  • Create New...