I know that dealing with the regular Forex system involves riba and other infractions, and it is prohibited as was stated by the Fiqh Council. My question has to do with dealing with the Islamic Forex, which also has some infractions, but there is no blatant riba involved in it. All I do there is just one type of business by which I make money, which is buying gold when it is cheap and selling it when it is expensive, and I make money as a result of the difference in price. I do not deal with anything else, but I make a great deal of profit from that. But I found out that the Forex does not make me trade with the money that I deposited there; rather that is only an insurance against loss, in the event of loss, so that they can take their rights. The dealing is done via financial boosting which multiplies the sum of money you deposit by as much as one hundred times, i.e., I deposit one thousand dollars, and I can carry out a transaction worth one hundred thousand dollars, and they do not take any interest for that, but they benefit from the difference in price between the request and the sale. In other words, they do not give me a loan for nothing, but because when I borrow, I will do this transaction through them and they will make money from it, even though they do not charge any interest. What is the ruling on the money that I make, and if there is any sin, who bears that burden? If I give some of that money in charity, will that make it halaal?
Praise
be to Allah.
Dealing with margins, or with the Forex system, is a matter
concerning which the Islamic Fiqh Council issued a statement that it is
haraam and is not allowed. You may see the text of this statement in the
answer to question no. 106094. The so-called
Islamic Forex is not free of the things that are mentioned in that
statement of reasons for the prohibition, or most of them.
The reasons mentioned by the Counsel for the prohibition are
as follows:
-1-
Firstly: It involves obvious riba, which is represented by
the addition to the amount of the loan which is called “paying fees for
delaying the deal”. This is a kind of haraam riba.
The fact that some institutions that deal in margins have
abolished these fees does not mean that the dealings are halaal, because the
following infractions are still present:
-2-
The combination of giving a loan and getting something in
return. You stated that they do not give you a loan for free; rather it is
so that you will buy and sell through them, so that they may benefit from
the difference in prices.
It says in the Council’s statement:
Secondly: The agent stipulates that the customer must deal
through him, which leads to combining both giving a loan for something in
return and paying commission, which is akin to combining giving a loan and
selling at the same time, which is forbidden in sharee’ah because the
Messenger (peace and blessings of Allah be upon him) said: “It is not
permissible to give a loan and sell at the same time…” The hadeeth was
narrated by Abu Dawood (3/384) and al-Tirmidhi (3/526), who said it is a
hasan saheeh hadeeth. In this case he has benefited from his loan, and the
fuqaha’ are unanimously agreed that every loan that brings a benefit is
haraam riba.
-3-
There is no hand-to-hand exchange with regard to that in
which hand-to-hand exchange is stipulated, such as currencies and gold and
silver. This comes under the heading of riba an-nasee’ah.
The Council said: Buying and selling currencies is usually
done without the hand-to-hand exchange prescribed in sharee‘ah which makes
it permissible to dispose of them (after buying them).
-4-
It causes harm to the economy. In the Council’s statement it
says:
Fourthly: This transaction involves economic harm to the
parties involved, especially the customer (investor), and to the economy of
the society in general, because it is based on borrowing to excess and
taking risks. Such matters usually involve cheating, misleading people,
rumours, hoarding, artificial inflation of prices and rapid and strong
fluctuation of prices, with the aim of getting rich quickly and acquiring
the savings of others in unlawful ways. Hence it comes under the heading of
consuming people’s wealth unlawfully, in addition to diverting wealth in
society from real, fruitful economic activity to this type of risk that has
no economic advantage, and it may lead to severe economic turmoil that will
cause great loss and harm in society.
That which is called the Islamic Forex may avoid one
infraction, which is fees for delaying the deal, but it is not safe from the
combination of lending and getting something in return, and the infraction
of delaying the hand-to-hand exchange, and causing harm to the economy.
Our advice to you is that you should fear Allah, may He be
exalted, and refrain from this prohibited means of earning a living. You
should understand that that which is with Allah cannot be attained except by
obeying Him, and that that which is haraam cancels out barakah (blessing)
and leads to bad consequences. We ask Allah to keep us and you safe and
sound.
And Allah knows best.
