BENEFIT 360: Ruling on Opening an Account in an Interest-Based Bank

As a general principle, opening accounts in interest-based banks—whether current accounts or otherwise—is prohibited. This is because it constitutes cooperation in sin and transgression. When money is deposited in such banks, regardless of whether the account is labelled as current or otherwise, the banks use these funds for interest-based transactions. Therefore, the default ruling is that it is not permissible to deposit money in interest-based banks. If an alternative is available such as a non-interest-based bank, it is obligatory to use that alternative and refrain from dealing with interest-based banks. However, 1) if no other non-interest-based alternative is available and 2) there is a necessity, then opening an account in an interest-based bank is permitted based on the principle: “الضرورات تبيح المحظورات” "Necessities permit prohibitions." Sheikh ibn Baz rahimahullah said: "There is no harm in depositing money in interest-based banks without earning interest if done out of necessity or fear of loss. However, if an alternative is available—such as depositing your money with a trustworthy merchant, in Islamic banks without interest, or in Islamic banks that operate according to Sharia-compliant principles and lawful profit-sharing—then this is what you are obligated to do. This ensures that you do not contribute to the promotion of usury or support those engaged in it." Source: https://binbaz.org.sa/fatwas/12414/%D8%AD%D9%83%D9%85-%D8%A7%D9%8A%D8%AF%D8%A7%D8%B9-%D8%A7%D9%84%D8%A7%D9%85%D9%88%D8%A7%D9%84-%D9%81%D9%8A-%D8%A7%D9%84%D8%A8%D9%86%D9%88%D9%83-%D8%A7%D9%84%D8%B1%D8%A8%D9%88%D9%8A%D8%A9-%D8%A8%D8%AF%D9%88%D9%86-%D9%81%D8%A7%D9%89%D8%AF%D8%A9 Similarly, Sheikh Yahya ḥafidhahullāh was asked: Is it permissible for someone to deposit his money in interest-based banks due to necessity, such as a lack of security, where keeping the money in his possession may put his life at risk? He responded: In such a situation, he is permitted to deposit his money in the bank until the necessity ceases, as indicated by the Āyah: "But if one is forced by necessity, without willful disobedience nor transgressing due limits, then there is no sin upon him. Indeed, Allāh is Forgiving and Merciful." [Al-Baqarah: 173] Once the danger has passed, he should withdraw his money, and he should not continue depositing it in banks unnecessarily. This is because cooperation in sin and transgression is not permissible, as Allāh states: "And cooperate in righteousness and piety, but do not cooperate in sin and aggression." [Al-Ma'idah: 2] Even if the individual does not take what is termed as "interest" from the bank, the bank itself utilises the deposited money in interest-based transactions, thereby making the depositor complicit in sin. Allāh warns: "Do not consume usury, doubled and multiplied." [Āl ’Imrān: 130] And: "Those who consume usury will not stand except as one whom Satan has driven to madness by his touch." [Al-Baqarah: 275] Furthermore, Allāh commands: "O you who believe! Fear Allāh and give up what remains of interest if you are believers." [Al-Baqarah: 278] Thus, interest (riba) is among the gravest of sins, and facilitating its spread among people is prohibited. [أسئلة السلفيين بالمهرة، بتاريخ: ليلة الخميس ١٥ جمادى الأولى ١٤٢٣ه‍.. دماج - دار الحديث]