Home » Hanafi Fiqh » Mahmoodiyah » Is my Job Halaal?

Is my Job Halaal?

Answered as per Hanafi Fiqh by Mahmoodiyah

Question:

Moulana I have a major problem, as you know I work in the bank. Before I was doing customer services in the call centre and that was fine because in know way was I an influence to Account transaction and in know way did I assist clients in making decisions regarding their accounts Basically I never worked with money.

I was offered a new post in a new department on the 1st of November and I accepted the post as the money was much better and it is a permanent job as my previous one was temp.

My job spec is as follows.

The Bank offers a service to big corporates where we assist them in paying their suppliers in a much shorter period then is normally taken by the buyer. For example Company X gives us the right to pay their supplier Company Y we pay Y on behalf of X in a shorter settlement period and we then get a discount that we take half and give half to X.

I will be the person capturing invoices and work orders and so forth. I will also be making sure that the right amounts are paid in and out of the accounts so  the supplier gets his money and X get their money and the bank get their share also.

They have no deemed the commission that we make as INTEREST and I am afraid of being part of writing and accepting interest and I fear my Sustenance to be Haraam.

here is a technical example of our work flow don’t know if you will understand it!!

 

          SETTLEMENT SOLUTION 
           

              The “Settlement Solution” is a product offered by the Bank in terms of which the Bank administers and facilitates electronic payment and settlement between purchasers and suppliers. As part of the process, the Bank will negotiate an early settlement discount with the various suppliers, which benefit will be apportioned between the purchaser and the Bank on the basis of a pre-approved formula.

While the suppliers will get settled immediately (less a discount), the purchasers will be given 30, 60, 90, etc days’ terms in line with their normal settlement terms, and they intend to house those overdrafts in the books of Business On-Line, under the heading Advances: Settlement Solution. Business On-Line will take the credit risk, and the age-analysis, monitoring and collection.

The facts as we understand them are as follows:

The Bank will administer and facilitate electronic payment and settlement between purchasers and suppliers.

The Bank will negotiate an early settlement discount with the various suppliers.

The purchasers will continue to settle with its existing policy of payment terms and days i.e. 45 days.

Let us put this in an example

The supplier invoices the purchaser for R100 with terms of an early settlement discount of 10% if paid within 10 days.

The Bank will settle and pay the supplier within 10 days and pay R90.

The purchaser will pay the bank within 45 days and pay R100.

The Bank will receive a profit of R10 which is as a result of providing a loan to the purchaser to effect early settlement to the supplier.

This profit that the bank receives from the purchaser is regarded as interest on the loan provided and is regarded as an exempt supply for VAT purposes.

Note

The income received by the bank needs to be correctly reflected in an interest account.

It is important that both the supplier and purchaser have the correct documentation to make an adjustment to the VAT account as a result of the early settlement discount.
 

w/salaam  


Answer:

 

                  

The “profit” that the Bank receives from the purchaser by making an early settlement and providing the loan to the purchaser is in actual fact interest, not commission, therefore this transaction is Haraam and it is not permissible for you to take part in this job.

And Allah Ta’ala knows best

Mufti Muhammad Ashraf

Darul Iftaa

Jameah Mahmoodiyah

Springs

 

15 December 2004

03 Thul Qa’dah 1425

Read answers with similar topics: