Q. "Thank
you for your answer to my question which appeared in November 1991 issue,
concerning the adjustment of the Interest amount to the loss of principal
in the BCCI. Please clarify whether the interest received from another
source other than BCCI can be adjusted against loss of capital in BCCI?
(M.S.
Desai, Saudi Arabia)
A. No, the Interest received from any other source cannot be adjusted
against loss of capital in BCCI. The principle underl- ying my former
reply is that any amount received from a debtor is always taken in Shariah
as part payment of the princi- pal, even through the debtor has paid it
in the name of interest. This principle will apply only so far as an equivalent
of the principal amount is not received by the creditor. But after the
payment of principal is complete, any axcess shall be treated as interest
and it will no longer be valid in Shariah to claim it from the bank.
But this principle is applicable only where the interest is paid by the
same debtor who owes the principal. If the principal is deposited in the
Bank A and the interest is paid by the bank B, the interest, in the case,
cannot be adjusted against the loss of principal deposited with bank A.
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