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Can I use the interest credited on my deposits to balance the interest generated on the loaned amount?

Answered according to Hanafi Fiqh by Askimam.org

Detail: I am unable to decide on a disturbing issue.  as follows.  Please help me in taking that decision My father has taken a loan of Rs 6 lac from a bank on the condition that the loan with interest be repaid in monthly installments to be deducted from monthly salary for a period of 4-6 years. now that I am earning handsomely, I want to deposit my earning in the same account so that the interest generated on the deposits could balance the interest generated on the loaned sum. This way, the net interest actually recovered from us would be minimized and we would not be at the bigger risk of paying more interest and more sin as such.

In this condition, the bank itself would generate and take away the interest without us needing to pay extra sum other than Rs 6 lac. Please guide me if this is the better way towards lesser sin or it is more sinful.  

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Brother in Islam,

Your understanding of the loan in reference being a sin is correct and the method of offsetting the loan does not alter the sin of taking the loan. [1]

In the above scenario it will be permissible for you to offset the interest charges your father has to pay the bank with the interest you are receiving on your deposits as long as both your accounts are in the same bank. [2] If the loan account and deposit account are in two different banks it will not be permissible for you to do so. [3]

And Allah Ta’āla Knows Best

Ismail Dawoodjee

Student Darul Iftaa
Zambia

Checked and Approved by,
Mufti Ebrahim Desai.

www.daruliftaa.net 

[1]الَّذِينَ يَأْكُلُونَ الرِّبَا لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطَانُ مِنَ الْمَسِّ ذَلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا فَمَنْ جَاءَهُ مَوْعِظَةٌ مِنْ رَبِّهِ فَانْتَهَى فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللَّهِ وَمَنْ عَادَ فَأُولَئِكَ أَصْحَابُ النَّارِ هُمْ فِيهَا خَالِدُونَ (البقرة-275 )

فتاوى عثمانى ج3 ص280 م معارف[2]

[3](فيجب رد عين الربا لو قائما لا رد ضمانه لأنه يملك بالقبض قنية وبحر) يعني وإنما يجب رد ضمانه لو استهلكه، وفي التفريع خفاء، لأن المذكور قبله أن البيع الفاسد من جملة الربا، وإنما يظهر لو ذكر قبله أن الربا من جملة البيع الفاسد، لأن حكم البيع الفاسد أنه يملك بالقبض ويجب رده لو قائما ورد مثله أو قيمته لو مستهلكا (الردالمحتار ج6 ص169 

This answer was collected from Askimam.org, which is operated under the supervision of Mufti Ebrahim Desai from South Africa.

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