Banking: Sharing Loan Proceeds While Imposing Interest Payment on the Partner

Practical Laws of Islam as per the teachings of Imam Khamenei

Banking: Sharing Loan Proceeds While Imposing Interest Payment on the Partner

English:

Question #1908:

I obtained a loan to set up a joint venture. I gave half of the amount of the loan to a friend of mine and made it conditional that he would pay all the interest due to the bank. Is what I have done shar‘ī?

Answer #1908:

If the granting of the money by the bank was on the understanding that the bank was party to the joint venture, that both the parties were aware of, the recipient has no right to dispose of it in any other avenue, let alone lend it to a third party. The recipient should treat the money as a safe deposit with him to be used in the agreed way. Otherwise, the very money should be returned to the bank.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Banking