Profit of money

Q: Some people borrow an amount of money from others and give them certain amount monthly as profit without this being based on any Islamic contract. It is done on the basis of mutual agreement. What is the ruling in this regard?

A: Such transactions are considered ribā-bearing loans. The condition to get ribā is invalid. The increase is regarded as ribā and is, therefore, ḥarām and not permissible to be taken.

 

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