Dealings with commercial banks

Question:

1)Are we allowed to have a bonded property from our commercial banks which are riba institutes?

2)If these banks is based on a system of ribaa, how is it possible to have banking with them whilst they also are sponsors of activities and projects that are against sharia?

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

You are correct that conventional banks are Riba institutes and they sponsor un-Islamic projects.

Almighty Allah says,

وَتَعَاوَنُوا عَلَى الْبِرِّ وَالتَّقْوَى وَلَا تَعَاوَنُوا عَلَى الْإِثْمِ وَالْعُدْوَانِ

Help one another in Al-Birr and At-Taqwa , righteousness and piety); and do not help one another in sin and transgression.( AL-Ma’idah 2)

Therefore, in principle it would not be correct for a Muslim to deal with a conventional bank. However, Islam is a practical religion and takes into consideration needs and circumstances.

In present day dealings, it is very difficult to stay away from using the facilities of a conventional bank. It is due to the need and circumstances the Ulama have granted a leeway for Muslims to use the facilities of a conventional bank. This is based on the following maxim,

الضرورات تبيح المحظورات.

Necessities permit the prohibited.

It should be understood that the leeway is confined to need. Accordingly, it will not be permissible for a person to go beyond the need and engage in bonds and interest bearing loans.

The ideal situation for Muslims is to establish an independent Islamic bank that functions completely according to Shari’ah principles of financing. In the absence of the ideal situation, Muslims are constrained to use conventional banks to fulfil their needs of Halal investments through a window in conventional banks. In such a situation, that facility must be completely independent to ensure the profits and dividends are Halal and Shari’ah compliant. There are Ulama and experts who have the skills and expertise to devise and supervise such products to fulfil the Halal investment needs of Muslims.

It is also important to point out that it is best for Muslims to search for Halal investment schemes out of the conventional banks.

And Allah Ta’āla Knows Best

Mufti Arshad Ali

Darul Iftaa, Jaamia Madinatul Uloom (Trinidad)

www.fatwa-tt.com /www.jaamia.net