Question:
In conventional bonds, money is lent and interest is paid. But in Sukuk, investors become part-owners and share in profit and loss. Does that difference make it permissible?
Answer:
In ordinary government bonds, money is lent, and a fixed interest amount is paid periodically. The amount is predetermined. That is Riba (interest). For example, if you invest one lakh rupees, they guarantee a fixed return every month or year. That fixed return makes it interest.
In the Sukuk model, instead of lending money, you are made a partner in the project. Suppose an airport project needs one lakh crore rupees. You buy certificates representing your share. If you invest one lakh rupees, you own a proportional share in the project. After construction, when the airport generates income, your return depends on actual profit. If profit comes, you receive a percentage. If there is no profit, there is no return. If there is loss, you share in the loss. There is no fixed, guaranteed amount.
The same applies to projects like toll roads. During construction, there may be no profit. After completion, toll collection generates revenue. From that revenue, investors receive returns according to their share. If the project fails or revenue decreases, the value of the investment may drop.
If the structure truly involves real ownership and genuine profit-and-loss sharing, and there is no guaranteed fixed return, then it does not fall under Riba. Riba occurs when a fixed amount is guaranteed regardless of outcome. If returns are based purely on actual profit and loss, then in principle it resembles permissible partnership.
However, one must carefully examine the documents. Sometimes hidden clauses may guarantee capital or returns indirectly. All terms must be reviewed thoroughly. If there is any hidden interest component or guaranteed return, then it becomes problematic.
But if it is exactly as described—true asset ownership, no guaranteed profit, and real sharing of profit and loss—then there is no clear basis to declare it haram. The key issue is whether riba is present. If riba is absent and genuine risk-sharing exists, then it cannot automatically be labeled forbidden.