07 May 2019 Ref-No#: 1627

,السلام عليكم ورحمة الله وبركاته

I’m thinking to start and open a Bank. As we know, we should not provide loans with requiring Interest (Riba, is the Cost of Borrowing Money).

So my Business Model will be that I’ll provide loans to people and just charge a fixed “exactly” amount of Money. For example, whether you take $10000 or $10,000,000, you will just pay $5000 (which then will be used for the costs of the Business and Exapansion of the Business, later)

جزاك الله خيرا


Wa’alaykum as Salam wa rahmatullahi wa barakatuhu,

Your question is not clear and we cannot understand how exactly will the bank operate. Is the $5000 an admin fee, and then there is no interest payable? So if a person asks you for $10 000 000 and intends to pay that over 20 years, are you only going to charge $5000 for admin, and give him as much as he asks for, over a long period of time? From where will you get the funds?

The best is to prepare a detailed business plan, get it checked by your financial advisers, accountants and lawyers, and then to send that through to us. Insha Allah, we will be in a better position to respond then.