Receiving interest from non-Islamic banks

Question 168: I would like to ask you questions about the bank transactions in a country like India where the Govt. is non-Islamic.

  1. If somebody keeps a particular amount of money (say one lac of rupees) in a bank for a fixed period of time say 4 years and the deal will be done on a fixed interest rate say 10%. After 4 years he gets the sum of Rs 146,000. Will the extra amount considered to be Haram (Riba) or will it be halal and if it is haram then what do we have to do with this amount of money?
  2. Almost all people have a savings account in the bank and the bank itself gives interest to their clients if they their money idle in the account for many years. Will the extra money considered to be Riba or not
  3. And what if somebody works in these types of banks; is it permissible to work there or not or is there any precaution to be taken?

Answer 168: These are the responses we have received from the offices of the Grand Ayatollahs so far regarding your inquiry:

Ayatollah Khamenei: A1 and A2) In your case in which you haven’t given the bank your money as a loan, the interest you receive is halal

A3) Working in such banks is permissible as long as one doesn’t get engaged directly in the transactions that have to do with riba (haram interest) and if one does get engaged in such transactions, he/she cannot obtain any wages for his/her work. As for the income obtained from these banks by its employees, it is also halal, given that one isn’t sure that the income given to him/her has haram money in it [so as long as you aren’t sure, the money is halal and there is no need to do research and see if it does or not].

Ayatollah Sistani: A1 and A2) In the case you mentioned, there is no problem, the only thing that needs to be observed is that you don’t get a loan from the bank that you will have to pay back with interest, and in the case of being obliged to get such a loan [because of certain extenuating circumstances], you can get it but not with the intention of getting a loan; when you are taking the loan, have the intention of istinghadh and refer to Ayatollah Sistani or his representative for permission for getting such a loan. Also, the interest received from non-Islamic banks is halal and isn’t considered riba.

A3) Working in such places is permissible.[1]

Ayatollah Makarem Shirazi: A1 and A2) Interest that one receives from the kuffar (kafirs) is halal.

A3) It is permissible in non-Islamic banks.

For further information in this regards, please read to the following answer:

Index: Taking interest from government organization, answer 167.

Index: Bank Interest / Investment in the Stock Market, answer 604.

[1] . Refer to: The official website of the office of Sayyid Sistani (ha), Q&A: Interest.


Taking interest from government organization

Question 167: A Pakistani government organization offers interest to their employee in exchange for some money the employee should invest, but with a term in which the probability of returning back their investments is small. Is it permissible to take such interest?

Answer 167: According to some scholars, there would be no problem to take such interest if it is given under a valid legal contracts like Mudärabah (A contract, entered into by two persons on the condition that the stock or Rãs al-Mãl in trade shall belong to one of them, and the labor to another, and in case profit is accrued, it should be divided between both of them. If the whole profit is stipulated to go to the proprietor (of the stock) it is called “Bida’ah, Hibah (donation) moawaddah (exchange contract), advocacy for business or Musharakat (partnership). According to other scholars, it is an example of haram usury.

The grant maraja’ answer to this question is as follows:

Ayatollah Khamenei (ha): There is no problem in it if it is done under moawaddah contract or the like. If you lend it, you are not allowed to take this interest.

Ayatollah Safi Golpayegani (ha): It is impermissible to take interest if you stipulate a condition by which they have to pay back its interest. If they themselves give you the interest there would be no problem to take it.

Ayatollah Makarem Shirazi (ha): Given the supposition made in the questions, taking this interest is considered as haram.

Ayatollah Noori Hamadani (ha): It is considered as a haram act if it is not done under any kind of valid Islamic contracts like Mudarabah and the like.[i]

For further information in this regards, please refer to the following answer:

Index: Rules on taking an interest-based loan before reverting to Islam, answer 293.

Index: Bank Interest / Investment in the Stock Market, answer 604.

[i] . This question has been sent to the office of grand Ayatollahs Khamenei, Safi Golpayegani, Makrarem Shirazi and Noori Hamedani (May Allah grant them long life).


Rules on taking an interest-based loan before reverting to Islam

Question 293: What is the ruling on loans made with interest (interest-based loan) before reverting to Islam? To clarify better my mortgage on my house is a loan that I pay interest on, should I seek an Islamic lending company and transfer my mortgage?

Answer 293: If it is an interest-based loan, it is haram to take it irrespective of whether one takes it from a Muslim or a non-Muslim; from an Islamic state or a non-Islamic state except for when one is in a difficult situation which makes committing a haram act permissible.

Taking a haram loan does not become halal with the permission of a qualified Mujtahid. In order for the recipient of the loan not to commit a haram act, it is necessary that he should take the loan with the intention that it is a transaction without return, even if he knows that he will end up paying the capital as well as the interest. The permissibility of taking an interest-free loan is not restricted to being needy or to an emergency situation.”

To explain further, he who receives the loan should not take it with the intention of paying interest. In his mind, he should have the intention that he is not going to give interest.

Note: Although, taking such interest-based loan is haram, but after that using the money is allowable. I.e. the one, however has already committed the sin, but would be allowed to use the money later.

Since, you were non-Muslim on that time, there would be no sin upon you in what have you already been committed such sins like taking the loan as Islam would forgive the past sins.

As a result, you would be able to use the money and no need to transfer your mortgage.[1]

[1] . Ajwebat al-Isteftaat (Farsi Answers to Religious Queries), vol.2, question 826.


Purchasing something from Haram Rizq

Question 004: I am a teenager that knows that my father is earning Haram Rizq (money). If something is purchased from that money does it also become haram?

Answer 004: If you are absolutely sure he is earning haram rizq you are not allowed to buy anything from that money. Otherwise, if you are not sure, there would be no problem to use it.

Therefore, buying anything with money earned in a fashion that is haram rizq, makes the thing itself haram.

Note: forbidding others from haram acts, or enjoining them to do their wajib ones, is wajib (obligatory) upon us, because it falls under the category of amr bil ma’ruf wa nahy anil munkar, and this applies to everyone. Thus, carrying this religious duty is also wajib, given that all the conditions are met and that it certainly applies.