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Guess how do they Charge/Give interest in Saudi Arabia?

Reader comment on item: Islamic Economics: What Does It Mean?

Submitted by Romesh Chander (United States), Sep 26, 2007 at 22:06

When you want a loan in Saudi Arabia, they don't give you loan on a bank based in Saudi Arabia, because they cannot charge interest. However, they will write the loan on their overseas branch, and they can charge interest now. Remember, the parent bank Headquarters are in Saudi Arabia. The Saudi bank acts an agent for their own overseas branch for giving the loan, making periodic payments of the loan. It is all a bookkeeping exercise. Where is usually the branch located (if it has a physical presence at all, otherwise it is just a shell company and probably a tax-dodge scheme)? Usually in Baharin or Dubai (both are muslim ruled countries).

Technically they are not charging interest in Saudi Arabia, because the loan was not given by the Saudi bank. But I wonder, if ALLAH is really fooled by this kind of logic/technicality; I hope this gurantees them a place in Islamic Heaven.

Similarly, if you want interest on your deposits, they will be written on their overseas branch.

Please don't call this Islamic Hypocrisy.

Submitting....

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