Question Summary:
i would like to know if the halal finances provided by banks such as HSBC Amanah scheme here in the uk are permisable

Question Detail:

i would like to know if the halal finances provided by banks such as HSBC Amanah scheme here in the uk are permisable

as they seem to charge a lot more plus the rates of rent can go up depending on the interest rates, so in a effect it seem to be the same as a conventional mortgage but more expensive.
 
 

Answer :

In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatuh
1.We have not studied any of the contracts of HSBC bank and therefore cannot comment on the Shariah compliancy of their products.
2.Shariah advocates the “willing buyer willing seller” principle. Any price may be proposed as an offer, and if the buyer is willing, he may accept. The price does not have to be market related. By way of example, if the seller offers an ordinary pen for $100, there is no harm in the buyer accepting the offer. The item is known, as well as the price. It makes no difference whatsoever as to how the seller arrived at the offer amount. Hence, in the case of the bank, the bank may make any offer to sell an item. If the client out of his free will consents, a valid deal exists. It makes no difference how the bank came to this figure, as long as a fixed figure was presented. In order to arrive at the figure the bank may wish to adopt any formula it deems appropriate. The choice of formula will not render the deal invalid in terms of Shariah. Once an amount is agreed upon, it remains fixed, and does not change. There is a significant difference between a conventional scheme and a scheme acceptable in the Shariah. In the conventional scheme, the amount is variable and time based. The longer one takes to pay it off, the more one has to pay, and conversely, the quicker one pays, the less one has to pay. While the amounts in a Shariah acceptable deal does not fluctuate. Hence, the Ulama do not have any objection to the bank using a formula which may be linked to the prime rate in order to arrive at the offer figure. Furthermore, you state that the rentals fluctuate according to the interest rates. If this occurs in a product that is marketed as “Shariah compliant, it definitely questions the Shariah compliancy of such a product.
And Allah knows best
Wassalam
Muhammed Zakariyya Desai,
Assistant Mufti
Checked and Approved by:
Mufti Ebrahim Desai
Darul Iftaa, Madrassah In'aamiyyah