Question
Dear Sir,
My question is regarding the article on Riba by Mr. Moiz Amjad. I am an employee of a certain organization. Part of conditions is Provident Fund. In this case, certain percentage of salary is deducted and placed in Provident Fund alongwith equal contribution from the employer. A board of trustee manage the investment of this fund which grows handsomely. This is my Fund to be taken back at the termination of employment or retirement. Is the increase or growth of Fund IS HALAL FRO ME. I want to buy a plot for a house. Can I take a loan on credit from bank and give interest from the profit earned in the Provident Fund. Please answer , I will be grateful.
Answer
There is a lack of information regarding the particular fund you have mentioned. It is only possible to give you a proper answer if we know how this investment is managed. In other words, the sort of investments is your money going into. If they are stocks or mutual funds that earn no interest then your investment is Islamically legal. However, if any part of the investment earns interest, whether it is from bonds or otherwise, then that part of the investment is forbidden. In many of these funds there is a mixture of investments thus you should do a thorough check as to where your earnings are coming from. Some may be based on non-interest earnings while others may be reliant on interest earning sources. Whatever you find earning interest then you may give the part that gained interest away to charity. You may keep your principle not the interest you gain. As for your future mortgage, if you keep the above in mind, only the profit you made without interest can be used for the down payment. This is true even if you have to pay interest but not if you gained interest.
I hope I have clarified the issue.
God knows best.