Question # 112: As we all know Riba (Interest) is haraam in Islam, but practically we all keep our money with banks who then lends out for interest. Even if I decide to not take interest by having a current account, fund would still be available with bank to lend it further. So practically by not taking interest I am helping the bank in increasing their activities and profitability. What is the best way to avoid a situation like this where I am not helping bank in increasing their activities and at the same time have an alternative to park my surplus money. I hope you understood the essence of my question.
bismi-llahi r-raḥmani r-raḥīm,
Assalamu ‘laikum warahmatullahi wabarakatuh,
All praise and thanks are due to Allah (سبحانه و تعالى), and peace and blessings be upon His Messenger (صلى الله عليه و سلم).
First of all, we implore Allah (سبحانه و تعالى) to help us serve His cause and render our work for His sake.
Shorter Answer: It is not permissible to put money in riba-based banks except for in the absence of Islamic banks or in case of dire need (such as fear of losing, stealing, robbery and like); in which situation, one should only use current accounts that bear no interest, as this will be regarded as a case of committing the lesser of two evils. On other hand, the investor can look for other halal investment opportunities to grow his wealth. Also Refer Question # 7 & Question # 224
Long Answer: Shaykh ‘Abd al-‘Azeez ibn Baaz said “It is not permissible to secure money in banks that deal with Riba, even if one does not take any interest. This is due to what that contains of assisting them in sin and transgression, and Allah has prohibited that. However, if a person is forced to do that and he cannot find any other place to keep his money safely other than the banks that deal in Riba, there is no sin in that, if Allah wills, due to the necessity.
Allah says in the Qur’an: “Indeed He has explained for you what He has forbidden for you, except what you are forced to do (due to dire necessity).” (Soorah Al-An’am, 6:119)
Whenever there is an Islamic bank present or a safe place that does not contain any aiding in sin and transgression, the person should deposit his money in it and it is not permissible for him to deposit his money in the bank that deals in Riba.” (Fatawa Islamiyah)
It is written in Fataawa al-Lajnah al-Daa’imah: “It is not permissible to put cash etc in riba-based banks and other riba-based institutions, whether that is with or without interest, because that is a kind of cooperating in sin and transgression, and Allah says in the Qur’an: “do not help one another in sin and transgression” (Soorah al-Maa’idah 5:2). But if [one] fears that his wealth may be lost, due to stealing, robbery and the like, and he has no way to protect it other than putting it in a riba-based bank, for example, then he is granted a concession allowing him to put it in the bank or other riba-based institution, without any interest, so as to preserve it, because that is committing the lesser of two evils.” (Islamqa.info)
Allahu A’lam (Allah (سبحانه و تعالى) knows best) and all Perfections belong to Allah, and all mistakes belong to me alone. May Allah (سبحانه و تعالى) forgive me, Ameen.