Debt and Loan: Returning Ribā Payments Received Under a Bogus Transaction After Lender’s Death

Practical Laws of Islam as per the teachings of Imam Khamenei

Debt and Loan: Returning Ribā Payments Received Under a Bogus Transaction After Lender’s Death

English:

Question #1758:

In a bogus transaction, my father gave a person a sum of money. In reality it was a loan. Every month, the borrower used to pay a sum of money, ostensibly, in the form of profits. After the death of my father, the borrower continued paying the money regularly until his death. Should such money be deemed ribā and, therefore, refunded to the borrower’s heirs from the estate of the lender, i.e., my father?

Answer #1758:

Assuming that the money he received was a loan, if the amount paid as profit was not more than inflation, it is no problem. Otherwise, the amount, which is more than inflation, is considered as ribā which is ḥarām in Islam. They should pay the surplus plus its inflation to the debtor or his heirs from the creditor’s estate.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Debt and Loan