You allow someone to use your store credit account, expecting them to pay on time. But they repeatedly delay payment, resulting in interest charges. Are you also sinful for the Riba, even though you did not make the late payments?
According to Islamic finance scholar Prof. Dr. Monzer Kahf, a person who has taken reasonable steps to prevent interest charges may not bear sin for another person’s failure to pay on time. This is subject to the circumstances and conditions outlined in his fatwa.
Is Opening an Account With an Interest Clause Permissible?
Prof. Dr. Monzer Kahf explains that opening an account containing a conditional Riba clause, where interest is charged only if payment is delayed, may be permissible when no alternative is available and timely repayment remains within the account holder’s control.
He distinguishes between agreeing to an arrangement in which interest can be avoided and actually allowing interest to become payable. He also states that it is prohibited for a Muslim creditor to impose such a condition.
Who Is Responsible When Someone Else Pays Late?
Consider someone who allows a friend to use their store account. The friend benefits from the arrangement but repeatedly misses payment deadlines, causing interest to be charged.
According to the scholar’s response, the account holder’s efforts to prevent Riba are an important consideration when assessing their responsibility.
“InShaAllah, there is no sin involved as long as you did your best.” Prof. Dr. Monzer Kahf
How Can Such Situations Be Prevented?
Prof. Dr. Monzer Kahf recommends arranging for the company to automatically withdraw the entire outstanding balance from the account of the person using the credit facility.
Where such an arrangement is available, properly authorised and supported by sufficient funds, it can help prevent late payments and reduce the risk of interest charges.
In the original question, the account holder also withdrew the friend’s permission to use the account after repeated late payments. This was a practical measure to prevent the situation from recurring.
The Key Islamic Principle
Helping someone financially should not become a means of facilitating Riba. When a person misuses an account and causes interest charges, responsibility must be considered in light of the actions and precautions taken.
Under Prof. Dr. Monzer Kahf’s opinion, someone who has genuinely done their best to prevent such charges may be excused from sin, InShaAllah.
Important distinction: This fatwa reflects a particular scholarly opinion concerning accounts with conditional interest clauses. It should not be understood as a general permission to enter every interest-bearing credit agreement.
Based on the fatwa explanation of Prof. Dr. Monzer Kahf, scholar of Islamic finance and economics.
Prof. Dr. Monzer Kahf | Official Website
Qur’anic reference: Surah Al-Baqarah 2:275, concerning the prohibition of Riba. Read the verse
