3 Safar, 1439 AH

Monday 23 October 2017

In the name of Allah, the most beneficent, the most merciful
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Question: As-Salaamu Alaikum Imam I will like to know if buying a treasury bill is haram (unlawful) or not. Thank you.
Answer:

Alaikum Essalamu

T-Bill is a short-term debt obligation backed by the U.S. Government with a maturity of less than one year. T-bills are sold in denominations of $1,000 up to a maximum purchase of $5 million and commonly have maturities of one month (four weeks), three months (13 weeks) or six months (26 weeks). The basic and underlying transaction is a loan to the US government paid with gain after a specific period of time (Maturity). The gain earned by these bills is a form of Riba and It is prohibited. FIQH Council of OIC have the following ruling:

Fiqh Council of Jeddah stated in its ruling No. 62/11/6: “Bonds that represent an agreement to pay its holder the principle with an excess or conditional usage is prohibited by the Shari`ah to issue, purchase, or trade because they are Riba based loans whether issued by a private or public entity. It makes no difference whether it is called saving or investment certificates or Sukuk. It makes no difference whether the gain attached to it is called profit, return, interest, or discount.”

Imam Senad Agic

The Islamic Cultural Center of Greater Chicago