Transaction closely similar to Riba

3-9-2015 | IslamWeb

Question:

I work in a company whose owner asked us to pay an amount of money to be saved for the employee along the year and the owner of the company will pay two-fold of the paid money. However, the employee does not have the right to withdraw his money except after a year. Is the extra money considered Riba (interest)? It should be known that he pays this extra amount which equals double the paid sum as donation. For example, if you pay 10,000 Riyals, you will receive 20,000 Riyals.

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Answer:

All perfect praise be to Allaah, the Lord of the worlds. I testify that there is none worthy of worship except Allaah and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

This transaction is so close to Riba or perhaps it is the very Riba because the owner of the company took the mentioned amount of money and disposed of it to provide cash money for himself.

He stipulated a condition upon the employee not to take back their money except after a year and to be repaid in double. So, it is like giving a loan on interest. This is the very form of Riba. Hence, this transaction is impermissible because it involves Riba. We advise the questioner to invest his money in lawful ways. There are many lawful ways that may result in greater benefit and profit.

Allaah Knows best.