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Can interest be charged in a way that harms Muslim brothers financially?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
I live in a Muslim society in mumbai.the society charges a fixed maintainance amount to the members monthly.they charge a penalty if it is not paid on time in terms of percentage.if the bill is not paid for second month they again charge a penalty in percentage first on the bill of that month then they combine the previous unpaid bill with this bill and again charge intrest on the total amount.and this goes on for months.if a person has to pay rs 10,000he is made to pay 15,000 for example.is it permissible to charge intrest in such a manner or haram as it puts undue burden on our muslim brothers who are unable to pay the bill on time due to financial problems.i have proposed the society to charge a fix penalty for eg rs 100 on every unpaid bill so that our brothers are not burdened with heavy interest.

Answer

(Fatwa: 618/614=N)

The interest taken by the society is totally haram and disallowed. Allah says: واحل اللہ البیع و حرم الربوا Likewise, fixing hundred rupees as penalty is also interest and disallowed. In short, the system of the society is interest based, it must be revoked and no Muslim should participate it.

Allah (Subhana Wa Ta’ala) knows Best

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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