Will I Be Sinful for Approving Riba-Based Loans?

Shafi'i Fiqh

Answered by Shaykh Muhammad Carr


Will I be sinful if, as a Board Member of a state-owned company appointed by the Muslim Ruler, I approve riba-based loans despite being unable to reject the appointment due to potential termination from other positions, considering that riba is permitted and the norm in such companies?


In the Name of Allah, the Most Merciful and Compassionate.
I pray you are in good faith and health. Thank you for your question.
I encourage you to accept the position. However, as a board member, it is impermissible for you to endorse riba-based loans, and doing so would be considered a sinful act. Allah (Most High) states, “O believers! Fear Allah, and give up outstanding interest if you are true believers.” [Quran, 2:278]

Rest assured that Allah will not hold you personally accountable if a riba-based loan is approved despite your earnest efforts and objections.

Serving as a Board Member

Attaining a position as a board member of a state-owned company is a prestigious accomplishment with potential benefits for both you and the Muslim community. May Allah bless this appointment.

At this elevated level, you can advocate for Sharia-compliant alternatives not only at an operational level but also at a structural level. Please remain mindful of your responsibility to promote goodness and discourage wrongdoing.

Permitting Riba

Allah has unequivocally prohibited riba. Consequently, the ruler lacks the legislative authority and right to permit such practices. We earnestly advise him to act with Allah consciousness (taqwa) and be mindful of Allah’s and His servants’ rights. The slave’s rights are violated by imposing riba, which is an unjust charge over and above the principal amount in a loan contract.

I pray this is beneficial and that Allah guides you and accepts your repentance.

[Shaykh] Muhammad Carr

Checked and Approved by Shaykh Faraz Rabbani

Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefitted from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door to students. As an imam, he has the unique opportunity to serve his community daily.

In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to administrative and advisory aspects of Islamic institutions. Since 2023, he has been the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari’ah Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.