Taking profit for giving a loan is interest

Question

Question: Zayd obtained one thousand rupees in cash from Umar on the condition that he would invest this money in trade and keep giving Umar ten rupees a month as profit. Accordingly, Zayd paid Umar ten rupees a month for forty consecutive months, and then, by the decree of Allah, he passed away. He left no proper trading account from which profit and loss could be seen, or which people Zayd owed or was owed by; rather, after his death a considerable debt of several thousand rupees was established against Zayd.

Answer

Apparently, the one thousand rupees that Zayd obtained from Umar on the stated condition is a loan (qard). In this case the “profit” of ten rupees is certainly interest, which it is haram for Umar to receive. Therefore it is wajib to count this amount too towards the principal.

Source: Fatawa Mahmudiyya

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