Is not the Service Charges of Islamic Bank also Interest? — Dr Zakir Naik

Is not the Service Charges of Islamic Bank also Interest? — Dr Zakir Naik

SKLIQA-14

Questioner: Assalamu Alaikum. My name is Fahad, I work as a computer programmer…. my question is related to Islamic banking. What is meant when certain Islamic bank says that they’re gonna offer a loan and X% APR, is that not interest, is that not interest?

Dr. Zakir Naik: Brother asked a question that, he wants to know about Islamic banking, Islamic Bank offers loan and they add a X%, they call it service charge, whatever it is, is it not interest? See basically interest is haraam in Islam there are no less than 8 different places in Allah says interest is Haraam. Allah clearly says in

Surah Baqarah ch. no. 2 verse no. 278 to 279 that

“If you give up not your demands for interest take a notice of a war from Allah and His Rasool”

So interest is Haraam. Now as far as Islamic Banking is concerned as you mentioned many Islamic Banks which give loan, point to be noted that most of the Islamic banks that are there, I don’t know of any Islamic bank which is 100% Islamic. I don’t know, may be, I don’t know.

In fact one of my interest is Islamic Banking but there are many which are MashaAllah quite a lot Islamic. There are many which are frauds also, fine, only namesake Islamic. What we have to note that we as layman if we can check up, check up, if you analyze there is Islamic system of Musharika, profit and loss sharing which is the best, safest. Musharika means you become a partner in it. Now other aspects are there, Mudariba is there i.e. cost plus. In cost plus many a times people falter and many a times its nothing but catching the nose long cut, you know. Aisa nose pakadne ka. You say it is nothing but trying to make a gimmick so we have to analyze and many Fatwas are given on this is allowed, that is allowed which many, which I don’t agree with also.

So when an Islamic bank comes we have to scrutinize, who is on the Shariah board, just by name please don’t go that’s not important what they do etc. so many of the Islamic banks, I wouldn’t call then Islamic, there may be a very small percentage Islamic. Now in the Islamic bank most of them do Mudariba, in Mudariba there is a problem, cost plus which comes. Sometimes it’s possible, Ijara is there i.e. higher purchaces is there which is Islamic; Musharika is safe, safe means if they are following Islamic principals haan… In other parts we have to check up and what we analyze that most of the banks, they falter and because they compete with the normal conventional bank, they keep the same interest, only name is different. Naam ka farak hai, label is different but it’s the same. So we have to be` careful while taking loan but as a layman. If suppose you think it is Islamic and you take it and if they are doing something wrong out of ignorance you have gone so the blame will come on them, not on you. if you know they are haraam and then you go then the blame will come on you. So it is the owners of the people running Islamic banks to check up whether they are following… What happens there are many fatwas in this and Fatwa shopping is very easy. You know what Fatwa you want, you’ll get. So they go and whether in Egypt or Pakistan or India so they take Fatwa which is convenient for them and then they sanction it. So you have to be careful while Islamic banking is there, not that its not possible… possible, very difficult. There are some banks I know which are MashaAllah good ...

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[Saa]

I agree with brother ZN. No Islamic banking is completely Islamic means interest free. Remember a rule of thumb regarding banks that they don’t have any source of income other than the interest on the loans that are given out to consumers. So interest is the blood of banks, they can’t survive without it.

[hijo]

We are in the era where it's really hard to not commit what is prohibited, because even though you're truthful, the system around you are forcing you to commit it. Like ZN said it's really hard to find any islamic bank that is 100% islamic.

There are other option, if you don't have money, then don't buy anything and taking any loans. It's better to save enough money to purchase it later.

But let's be real, something in this world, you cannot buy it in cash or directly from a seller. You're required to make a loan from bank (bank will pay the seller, and you need to pay the bank). It just so hard to run from it

[har]

Of course it's interest... ppl just have to play their games

[eternalpassenger]

*Ramadan is again approaching in our lives* who is waiting *heart soothing Arabic Nasheeds* listen

[WaqManVR]

It would be good if Dr Zakir could do a video saying what we need to check.

[hamadahmadansari]

As a Postgraduate student of Islamic Finance, I can say that the answer was somewhat confusing because Islamic banks don't provide loan and only provide lease facilities which is why I think the answer is insufficient. This video also did not answer the question asked in the title and to answer that I will simply reply the service charge to be similar as packaging fee charged by the food vendor on a food delivery app. Hope that answers the question.

[vepanurnazarov]

I dont think that there are any 100% halal banks at all. All the so called islamic banks of UAE and KSA belong to the royal familys' which in turn keep their money in Swiss banks or invest into the western economies which function by rebah. Dr. Naik knows this pretty well. And its easy to do dawah when somebody is giving you money for living. Saudi King gave Dr. Naik $200k, how come Dr. Naik could accept it while he knows that this money is coming from King's pocket which he hasnt earned in halal way.

[interestingstories]

Mere csn ne Islamic bank se loan lianha dubai main aur kafi tehqeeq ki thi mujh se bhi poocha tha mene bhi thori boht research ki k sood ni ha phir us ne le liya ab kia krain

[MrHellsing]

Banks needs to abandon profit rates and charge a flat rate. E.g. a 0% loan for a mortgage but charging. $40, 000 more than the home was purchased for. The buyer saves hundreds of thousands on interest and the bank makes their 40k over 15 years

[jorgearsenio]

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[mohamedsirajudeen]

It is understood that Riba is prohibited unarguably, but does it mean Interest rate and the Riba same ? it is the question to answer, Further, need to clarify what is intensive meaning of Riba not as just defining interest. The interest element has the controlling power and make money market equilibrium whereas if such equalizing Interest rate to Riba bring entire world into Haram concept. Almihgty clearly stated that he permitted Business and prohibited Riba. Therefore it is very important to identify what is Riba not as defined Interest. According to my knowledge interest rate is not Riba.

[ABMRefutes]

Good answer. But i would like if you did not deal with any Fiqh matter.
Anyways,

*Refuting anti-Islamic polemics and allegations against Islam.*
*Assalamu alaykum everyone* ❤️🥰

[lostkid]

Sir i have a question
Those who just not only physically disabled even mentally disabled who dont have any sense about any good/bad and even new born babies who dies at 1/10 months or 1/2 days after born
Will they go jannah?
If they get jannah then i m curious

[sameeraamir]

What about the fee in the US banks take; We have no other option.

[Iamthewarner]

*DON'T FORGET TO RECITE DUA AFTER EATING YOUR FOOD*
 Sahl bin Mu`adh bin Anas narrated from his father that:
*The Messenger of Allah (ﷺ) said:* *“Whoever eats food and then says this Dua his past sins shall be forgiven.”*

*الْحَمْدُ للَّهِ الَّذِي أَطْعَمَنِي هَذَا، وَرَزَقَنِيهِ، مِنْ غَيْرِ حَوْلٍ مِنِّي وَلَا قُوَّةٍ*

*Alhamdu lillaahil-lathee 'at'amanee haathaa, wa razaqaneehi, min ghayri hawlin minnee wa laa quwwatin.*
(At Tirmizi, 3458)

Meaning:
*Praise is to Allah Who has given me this food and sustained me with it though I was unable to do it and powerless.*

*Take Screen shot of this so that you don't forget and share to others to earn reward.* *Jazakallah*

[nafeel]

To be on the safe side shun all banks and do business only by cash.I am a victim of a bank.

[koolaydkkid]

people need banks and banks need some type of income. Without banks most people cant buy a car or a house and are homeless. Nor is there any way to safely transfer large amounts of money or keep your money safe. This is the only thing in islam that i think islam got wrong. No other option

[adnanrezwan]

So when a Muslim country take loan on interest to build a road or bridge and they pay the money back with interest it’s allowed cuz all Muslim countries take loan on interest

[albertnawab]

Not at all. That is service charge.
1440 years ago, there were no bank
in Saudi. No Bank notes. No currency.
If they do not take service charge, who
will pay the staffs' salary, Electricity bill,
building rent, Security charges and Insurance etc...???🤣🤣🤣

[khalidamakin]

Plz it does not answer question, charges are interest or not