Question # 224: Can the Amount Received as interest from Banks be used for our Apartment Facilities. Like building wire Fencing or buying chairs or buying a Sports equipment for apartment association. Please guide me. Which will be a charity for Association.
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: Putting money in the bank for interest is emphatically forbidden. However, if a Muslim has in the past engaged in receiving bank interest, then he has to repent to Allah (سبحانه و تعالى) by giving up the sin, regretting and resolving not to go back to it. Next, he has to get rid of the haraam interest by spending it on charitable causes such as giving it to poor, repairing public washrooms, and helping debtors, who are unable to pay off their debts. This interest, which is considered forbidden and unlawful for the one who earned it, is permissible and lawful for the one who is given this money.
Long Answer: Putting money in the bank for the purpose of interest is emphatically forbidden (Refer Question # 7 & Question # 112 & Question # 162 for details).
However, if a person has engaged in riba [for example, by way of receiving bank interest], then he has to repent to Allah by giving up the sin, regretting what he has done, resolving not to go back to it, and getting rid of the haraam interest by spending it on charitable causes. He is not allowed to benefit from it himself or spend it on those on whom he is obliged to spend. Shaykh ‘Abd al-‘Azeez ibn Baaz (may Allah have mercy on him) said: With regard to the interest that the bank has given to you, do not give it back to the bank and do not consume it yourself; rather spend it on charitable causes, such as giving it to the poor, repairing public washrooms, and helping debtors who are unable to pay off their debts. (Fataawa Islamiyyah)
If a Muslim has earned or received unlawful money, he should get rid of it. He must neither derive any personal benefit from it, such as spending this money in eating, drinking, housing, family expenditure, educational tuition, nor can he use it in averting hardship and acts of injustice as paying compulsory insurance fees, government or sales taxes, and customs and duty charges. Indeed, the intention of its removal must be the purification of one’s money from interest, and it is not considered alms giving because Allah (سبحانه و تعالى) is pure and good and He, the Almighty, accepts only that which is pure and good. This interest money can be spent in many beneficial areas, such as for the poor and needy, for medication costs for needy people, helping advocators of Islam, sustaining the impoverished and relieving debtors who cannot repay their debts. Moreover, this money could be used in Islamic Center needs, such as constructing mosques, roads, etc.… Thus, spending this money in the tuition of needy students studying in educational institutions falls within the aforementioned possible avenues of expenditure. This is permissible even if these institutions are supervised and directed by unbelievers, on condition that the subject areas studied are Islamically permissible and do not result in any harmful or unlawful consequences. Moreover, this interest is considered forbidden and unlawful to the one who earns it, but as for the people to whom this money given, it is permissible and lawful to make use of it, for it is considered as lost money that no one owns. (Fataawa Islamiyyah, Al-Fawzaan)
(The above answer is based on various answers provided by Shaykh Muhammad Saalih al-Munajjid on similar topics)
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.