non islamic financial institutions

Started by Nura, May 17, 2013, 11:46:11 AM

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Nura

Salamun alaikum brother,
I read your very informative article on riba. Your approach is different than traditionalista, you rightly consider the nature of paper money and say that if the amount of interest charged is equal to the time dependant increase in the certain amount of money then its ok. But calculating such a rate of interest that would yield the time dependent increased amount of money is not possible. As an economics student i can tell this because we are taught that due to the presence of black markets, impossibility of accruing perfect information regarding monetary transactions and demand and supply of money in an economy it is impossible to calculate such an interest rate. So non islamic banks cant charge that rate. So they charge a rate that they fix basing on assumptions and speculative calculations.
Do you think then working in such institutions is haram and so is keeping money in their savings accounts?

Thank you
Not all those who wander are lost - J.R.R. Tolkien

Nura

The rate of interest these institutions charge yield an amount of money that reflects the time dependent increase in money but the amount is not exactly equal to it. The interest amount of money can be slightly more or less than the time dependent increased amount.
Not all those who wander are lost - J.R.R. Tolkien