FatwaPenangTransactions & Finance
PINJAMAN WANG KERAJAAN
What is the ruling on borrowing money from the government when an additional charge is imposed?
Short answer
The Penang Syariah Committee ruled that government loans are in principle riba.
A reference, not a fatwa. First sentence of the summary below — read the original fatwa and consult your state authority before acting.
- Authority
- Penang State Mufti Department
- Date
- Status
- Fatwa committee decision
- Series
- Keputusan Fatwa Negeri Pulau Pinang (e-Fatwa)
- Topic
- Transactions & Finance
No evidence of gazettement in the source — this is not a gazetted fatwa.
Summary
The Penang Syariah Committee ruled that government loans are in principle riba. However, since the facility is given to low-ranking officers and the amount collected is small compared with other financial institutions, an extra charge for administrative purposes is permissible. If the charge is imposed in the name of interest, it remains forbidden as riba.
Written in our own words from the original fatwa — check the source before acting on it.
Pinjaman kerajaan adalah hukumnya riba.
Read the full fatwa on the Penang website (new tab)
How to cite
Cite the original fatwa and its authority. Rujuk Fatwa is only where you found it.
Penang State Mufti Department. “PINJAMAN WANG KERAJAAN”, 10 October 1986. http://efatwa.penang.gov.my/fatwa_details.php?fatwaid=1089. Found via Rujuk Fatwa: https://rujukfatwa.com/en/fatwa/ruling-on-government-loans-and-riba/