Interest and Gambling

Q: Is it permissible for one to purchase a vehicle or property through the bank? At times, the bank instalments are fixed, and at times, it fluctuates. What is the Shar’ee ruling in both situations?

Q: What is the difference between a service plan and medical aid, insurance or hospital plans? All seem to render a service to the person in case of need.

Q: A person runs a business and sells goods to people on account. What provision does Islam have for this person’s security in terms of him getting his money on time as it is not permissible to charge a penalty upon late payment? Sometimes, the account can be so huge per month that it can bring his entire business to a standstill.

Q: Is it permissible for one to enter into a competition where one is required to pay a fee and then stands a chance to win a prize? In the case where one does not win the prize, one will lose the fee that he had paid and receive nothing.

Q: When our customers pay using credit cards, is it permissible for us to allow them to choose the “budget” option?

Q: How should interest money be disposed of?

1. Is tamleek (passing of ownership) necessary i.e. does it have to be given to an individual person or can it be given to madaaris or for digging of wells, etc.?

2. Can it be given to non Muslims?

3. How poor must a person be to give him interest money?

4. Can interest money be used to pay tax, fines, bank charges, etc.?

5. If a person has bank accounts at multiple banks, does he have to withdraw the interest from each bank separately or can he just give the amount in sadaqah from his cash on hand?

6. If a person is in debt, can he be given interest to help him settle his debts?

7. Is interest money regarded as dirty wealth for the recipient?

Q: I recently read an article which claims that it is permissible for a Muslim to take out a medical aid contract. The article explained that if a stipulated monthly fee is paid to the medical aid company in return for which they assume responsibility for the client’s hospitalization or medical expenses, it will be permissible.

The reason for this medical aid contract being permissible in Shari’ah is that it is regarded as an ijaarah contract (i.e. hiring of services) between the member and the medical aid scheme. The ijaarah works in this manner that the member pays a fixed and mutually agreed amount monthly, and in exchange, the scheme takes responsibility for his treatment and wellbeing.

The article also stated that the medical aid scheme can be compared to hiring the services of a barber and a wet nurse. In many villages of India, it is a common and well-known practice for a family to give the barber a stipulated amount of grain or cash at the time of harvest. In exchange, the barber takes responsibility to cut the hair of the family whenever they wish during the year. In this case, although the number of haircuts that he will give to the family is unknown, this ambiguity is tolerated and overlooked as it does not lead to any dispute.

Q: When giving a loan without interest, we charge a loan process amount. Is this haraam or not?

Q: A person wishes to take out third-party insurance. He claims that this form of insurance is permissible because the insurance company will not pay him anything in the event of an accident but will rather pay out the third party. Is third party insurance permissible?

Q: Is an income benefit/provider insurance policy allowed whereby one will receive an income if disabled and cannot work. At the age of retirement the policy will lapse with no benefit.