What is the Islamic position on

Q: I deal in gold jewelry as follows: I borrow gold and give banknotes as security that covers the gold value or even more either from Al-Rajihi Company, local institutions, or banks bearing in mind that they neither take interest from me nor give interest to me. However, I know that they benefit from the money I deposit and I also benefit from the gold I borrow. What is the ruling on this? If the bank or company agrees to lend me a certain weight of gold, which we specify and we sign an agreement between us, is it permissible to assign them to sell it in international markets for I am certain that they do not buy it, rather they sell it in the international markets?


A: The loan as you have described is a loan that draws interest. Thus, it is impermissible. This is because the creditor invests the money of the loan until the debtor pays off the loan; and every loan that draws interest is Riba (usury).May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his Family, and Companions.


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