Dealing with interest-based banks with intention of empowering Muslims
Fatwa No: 320269

  • Fatwa Date:14-1-2016 - Rabee' Al-Aakhir 4, 1437
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Assalaamu alaykum. I live in a secular country although about 60% of the population consists of Muslims. Interest is haram! The majority of our banks are interest based. If we, the Muslims, do not do busines (invest and conduct day-to-day business) with them, then the non-Muslims will control the economy, to our detriment, and likewise with the capital market. What is the way out for us Muslims in this country? In these circumstances, can a Muslim invest in the banks and trade in their shares in the capital market? What should a Muslim do with the dividend paid to him by banks and companies quoted in the capital market? Wassalaam.


All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

The lawful forms of investment are not confined to the transactions with interest-based banks or trading in prohibited shares in the capital market; however, the devil beautifies the unlawful, threatens with the prospect of poverty, and enjoins immorality. Allaah, The Exalted, says (what means): {Satan threatens you with poverty and orders you to immorality, while Allaah promises you forgiveness from Him and bounty. And Allaah is all-Encompassing and Knowing.} [Quran 2:268] Verily, there is no blessing in prohibited earnings, and whoever lives on unlawful earnings incurs his own destruction if Allaah does not confer His mercy and grace upon him (guiding him to repentance).

As long as the Muslims make up the majority of the population, then they can impose their terms on the banks and markets because the main concern of the traders is making profit. Were the Muslims, who make up the majority of the population, to boycott these banks and abstain from engaging in the prohibited activities and investments, then the traders and banks would comply with their terms because their main objective is to make profit. In fact, this was the situation in many Muslim countries, but when the capital providers found Muslims refraining from partaking in dealing with interest and prohibited transactions, they opened Islamic banks and provided takaaful (Islamic cooperative) insurance based on the sharee'ah and the like of Islamic transactions.

Hence, seek earning a living through lawful means and honor your religion until your demands are met instead of compromising it and blindly following others. Allaah, The Exalted, says (what means): {So do not weaken and do not grieve, and you will be superior if you are (true) believers.} [Quran 3:139]

The honor and dignity of Muslims is based on their adherence to the Book of Allaah and the Sunnah of His Messenger  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) and abidance by the teachings of Islam in their lives as due. ʻUmar ibn Al-Khattaab  may  Allaah  be  pleased  with  him said, "We were a people who lived in humiliation and then Allaah gave us honor through Islam; were we to seek honor through anything other than Islam, Allaah would humiliate us once again." Imaam Maalik  may  Allaah  have  mercy  upon  him said, "The latter part of this ummah (nation) will not be rectified except by what rectified its former part."

Hence, if you seek honor and dignity, then honor your religion; Allaah, The Exalted, says (what means): {And if you fear privation, Allaah will enrich you from His bounty if He wills. Indeed, Allaah is Knowing and Wise.} [Quran 9:28]

As for buying shares in the usurious banks and investing money in them, it is plainly forbidden and the Muslim must avoid it. Please, refer to fataawa 88694and 90054.

The ruling on share profits depends on the nature of the shares; if the shares are prohibited, then the profits gained are prohibited as well and the Muslim must dispose of them by spending them in charity for the poor and needy or for the general benefit of the Muslims. However, if the shares are lawful, such as is the case with the shares of the companies whose activities are lawful and who do not deal in interest in all its forms, taking loans or lending out loans with interests; in such case, there is no harm in buying shares in such companies and availing oneself of the profits gained through this investment.

For more benefit, please refer to fataawa 85042and 92713.

Allaah knows best.

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