Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Kindly guide me with regard to the bank interest.

1. How do we deal with the interest which the banks credit to our account.
2. can we purchase a property which the seller has purchased with the help of bank loan , and which a condition or situation that certain part of the bank loan amount will have to be cleared by the purchaser and pay the seller the remaining amount. Example – a property worth 100,000 the bank loan is 50,000 and  50,000 to be paid to seller to get it registered.

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Answer:

What to do with interest

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Your Question: How do we deal with the interest which the banks credit to our account.

Allah and His Messenger (saws) have indeed declared the receiving and paying of ‘riba’ as absolutely Haraam and prohibited for the believers in very strong terms, and it is the prescribed duty of every believer, who sincerely believes in Allah and the Last Day, to abstain from dealing in ‘riba’.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:

That they took ‘riba’, although they were forbidden. And that they devoured men’s substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!

My beloved brother in Islam, first and foremost one who believes in Allah and the Last Day, must immediately abstain and stop taking any interest.

It is not as if it is deemed permissible in Islam for one to continue taking interest as long as he spends it on charity; for Allah does not accept anything in His Cause unless and until it is pure and lawful.

Sahih Muslim Hadith 2214 Narrated by Abu Hurayrah

Allah's Messenger (saws) said: ‘O people, Allah is Good and He, therefore, accepts only that which is good!’

Now the question arises what should one do with the interest money one has already accumulated in the past in ignorance of the Laws of Allah?

For the unlawful ‘interest’ money that one has accumulated in one’s past in ignorance of Allah’s Laws, the person has two choices:

1. One may leave it in the bank.
2. Or, one may take it and dispose it.

Some scholars are of the opinion that it does not help the cause of the believers to leave the interest in conventional banks for at best it helps them to generate more interest, and at worst, they may dispose it to an institution which might work against the Cause. In cases where one has already accumulated interest money in ignorance of Islamic Law, and Allah Subhanah has guided them, and they now wish to dispose off that illegal money, the scholars are of the opinion that one may take this interest with the intention that he wants to rid himself of this evil thing, and give it away to some charity without seeking any reward from Allah Subhanah for this spending. His only intention should be get rid of this unwanted and illegal money, and thus purify himself from the evil of ‘riba’. The believer who does this only because he fears the accounting of Allah on an Inevitable Day, will, if Allah Wills, be rewarded for keeping himself pure from the evils of ‘riba’.

The spending of illegally and unlawfully earned wealth does not have any worth in the Sight of Allah; for Allah is Good and Pure, and He accepts only what is good and pure.

The issue with the illegally and unlawfully accumulated money is not how best to spend it, but how soon can one rid himself of this illegal and unlawful wealth. His only intention in giving this money away should be to purify oneself and get rid of the evil that is with him. This illegal and unlawful money earned from interest can be compared to a burning coal in one’s hand! When one unintentionally and accidentally holds a burning coal, his only intention is to get rid of the burning coal from his hand; not where best to place it so that it can be of some benefit!

Your Question: can we purchase a property which the seller has purchased with the help of bank loan , and which a condition or situation that certain part of the bank loan amount will have to be cleared by the purchaser and pay the seller the remaining amount. Example – a property worth 100,000 the bank loan is 50,000 and  50,000 to be paid to seller to get it registered.

There is absolutely no harm if one purchases a property from a seller who chose to buy the property through a bank loan; just because the seller chose to buy the property through an interest based bank loan does not make the property itself unlawful, the burden of the sin of indulging in interest would be borne by the seller alone.

But to purchase the property in a manner whereby the buyer pays a part of the property amount to the seller and indulges in the paying of interest by taking over the balance bank loan of the property would be absolutely unlawful in the Sight of Shariah; for then the buyer would be involving himself in the paying of interest, which is categorically forbidden for the believers who sincerely believe in Allah and the Last Day.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan