Darul Ifta Kauzariyya

Is bank loan permissible when we get a huge amount as subsidy on loan

Qu-Id: Q0329
Madhab: General/Other
Date: 01-01-1970
Question:
السلام عليكم ورحمةالله و بركاته Respected Ustad, I am running an industry since last 3 years. The concerned govt. department will assist the industry by providing 40 percent of the project cost as subsidy. However, it is available only if we take bank loan. In my case the project cost is 8 Cr and as such the subsidy amount is 3.2 Cr. If I take 4.5 Cr loan, I have to repay only 1.3 Cr plus its interest since the subsidy amount will be transferred to the bank immediately on availing the loan. I would like to know whether it is permissible in Holy Shari'a to take bank loan in such a situation. Wassalam, Abdurraheem

Answer:
بسم الله الرحمن الرحيم
الجواب وبالله التوفيق والنجاح

Such loans are permissible in shari'a.Because, according to the scheme of subsidy we do not have to pay more than the amount we borrowed. The interest forbidden by the Islam is to pay more than the amount borrowed.

والله أعلم بالصواب
Written by: Mufti Mohammed Adil Al Kauzari
Checked & Approved by: Mufti Abdul Hakkim
Published by: Mufti Abdul Hakkim