Question

Working for a company borrowing money from usurious banks

173

Question

Assalamu Alaikum Wa Rahmathulla hi Wa Barakathu Dear Learned Scholar Brother, one of my close friend seeks an opinion as to the income earned by him whether it is from halal sources or not. The Co. he is employed is engaged the sale of machines and spare parts. Due to trade norms, the Co. is compelled to grant extended credit period to customers, while commitments to suppliers / salaries / utility payments have to be met much earlier and as a result the Co. is faced with a shortfall in working capital finance. This situation has compelled the Co. to utilize an overdraft facility from a conventional bank as and when monies are received from customers, the overdraft is settled. Salaries are also paid from the overdraft, does this income make it halal for my friend?

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Accepted Answer

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.

What is known as overdraft is nothing but a loan with Ribaa (interest and usury), and it is known that Ribaa is one of the great major sins. Allaah Says (what means): {O you who have believed, fear Allaah and give up what remains [due to you] of interest, if you should be believers.}[Quran 2:278]. Furthermore, the Prophet said: "Ribaa consists of seventy kinds or doors of evil, and the least of them (in severity) is similar (in sin) to one having sex with his own mother". [Ibn Maajah].

Therefore, the said company should stay away from this obnoxious sin.

Anyway, it is permissible for you to work for it since most of its money come from lawful sources, but it is better to avoid working for it and look for another work with a company whose money are not mixed with forbidden income.

For more benefit, please refer to Fatwa 82032.

Allaah Knows best.

Fatwa

Working for a company borrowing money from usurious banks

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Related Fatwa

Is it halal to work for a company that creates halal IT products but some of its stakes are owned by an interest-based bank?

Ruling on a technician or business owner working with banks, temples, hotels, etc.

Ruling on Profits in Halal Business with Haram Income

Benefitting from income earned from a job that involves selling both permissible and forbidden items, such as pork

Ruling on using former employer's contract template in business

Working in a Company which Markets Machinery with Dual Use in Halal and Haram Activities

Ruling on ill-gotten money due to cheating

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