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The Muslim brother doesn’t trust him much. So this non Muslim guy gives him  a precious stone which is worth USD100,000 as a guarantee to assure the Muslim brother that he will pay back the money on time. This non Muslim guy wrote an IOU as follows:
I, Mr XXX borrow USD10000 from Mr XX. I promise to pay back his money within three months. I give Mr XX a precious stone as a guarantee. If I cannot pay back the money on time, the precious stone will be at Mr XX’s disposal.
Now three months have passed, this non Muslim guy couldn’t pay back the money. So what should the Muslim brother do to the precious stone? Can he sell the stone and keep all the money for himself? But the non Muslim guy only borrowed USD10000 only, the precious stone worth USD100,000. Is the extra USD 90000 a riba?
asked Jul 14, 2020 in Usury / Insurance by Hosamuddin ebady

1 Answer

Ref. No. 1024/41-219

 In the name of Allah the most Gracious the most Merciful

The answer to your question is as follows:

The Muslim brother should sell the precious stone received as a guarantee and keep only as much money as the non-Muslim owed to him i.e. 10000 USD only. The rest amount of 90,000 USD must be returned to the non-Muslim brother. The non-Muslim brother is the owner of extra amount of 90,000. So it is forbidden and haram as per Shariah for a Muslim to take extra amount.

And Allah knows best

Darul Ifta

Darul Uloom Waqf Deoband

answered Aug 12, 2020 by Darul Ifta
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