Question
Our National Savings Schemes in Pakistan do not take loan from its citizens which is later to be refunded to them at predefined interest rate. It only urges people to invest. The amount collected is financially manipulated to help out affairs of the state on one hand and help its citizens to reward in the form of payment of some amount on monthly or quarterly etc basis at some predetermined rate depending upon amount of the investment on the other hand? Will it be riba transaction?
Answer
Any investor that knows their money is reimbursed with an additional predefined interest rate is actually receiving interest (riba). The transaction is forbidden in Islam.
I hope this helps.
God knows best.