Bissi System Of Banking & Loan Without Interest

A lot of people in India do not have access to Bank account and none of us like to pay interest on loan. Some Muslims in India do not take loans from Banks or for that matter open Fixed Deposit accounts with Banks because giving and taking interest is considered to be Haraam (Forbidden in Islam). Due to these reasons, Indians have developed an innovative system of Banking in India called "Bissi System". Bissi system is extremely popular among the Muslim community in Maharashtra and Gujarat.  Let us find out how the Bissi System works.

For Bissi system, there need to be a Bissi Collector (The one who collects money from all the members) and Bissi Members (The one who deposit money with the Collector). To be either a Bissi Collector or a Bissi Member, you need to fulfill the following criteria:

1. Both the collector and the members must be trustworthy and know each other.
2. Collector and Members must reside in the same locality.
3. Collector and Members must own a house in that locality. If any of them happen to stay on rent, then one of their relatives must own a house in that locality.

There must be a total of 10 members in any Bissi system. Once 10 or more members agree to form a Bissi and decide on a collector, the Bissi system starts. Let us take an example to understand how Bissi works.

• Bissi Start Date:       Jan 1, 2017
• Bissi Duration:         12 Months   
• Bissi Amount:          Rs. 12000
• Bissi Installment:     Rs. 1000
• Bissi Frequency:     Monthly  
• Bissi Members:      11 Members and 1 Collector (Total 12 Members)

On the 1st of every month, starting from Jan 1, each member will deposit Rs. 1000 with the Bissi Collector.  Therefore on Jan 1st, the Bissi Collector will have Rs. 12000. The first  Bissi by default is given to the Bissi Collector. So the collector gets Rs. 12000 and she can do whatever she wants to do with that money.

Again on Feb 1, every member will deposit Rs. 1000 with the collector. Collector will also add Rs. 1000 so the total amount with the collector on Feb 1 will be Rs. 12000.

Now 11 chits will be made with every members name excluding the collectors name as she already got 12000 Rs and she needs to add 1000 Rs each month for a year to the Bissi.

The chits will be placed in a bowl any of the members will pick one chit and the luck member in that chit will be given Rs. 12000 in the second month. This will financially help that member as he/she will get a personal loan of Rs. 12000 and will have to pay Rs. 1000 each month till the end of Bissi duration. This ensures that members who get their Bissi draw in the first few months end up getting personal loan without interest and those members who get their Bissi at the end have their money safe and secure with a trusted person and 1 year down the line can get that money back and it will help them financially.

This practice of Bissi system is very prominent among Muslims in Mumbai.