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Last Updated: 2008/09/26
Summary of question
What is the ruling on putting money in non-Islamic banks and is the interest received from it considered haram riba? Also, can one work in these banks?
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?
Concise answer
Detailed Answer

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

The office of the Grand Ayatullah Khamenei:

A1and2) 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].

The office of the Grand Ayatullah Sistani:

A1and2) 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 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 Ayatullah 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.

The office of the Grand Ayatullah Makarem Shirazi:

A1and2) Interest that one receives from the kuffar (kafirs) is halal.

A3) It is permissible in non-Islamic banks.

For further information, see:

1- Index: Receiving interest from non-Islamic banks, Question 472 (website: 513).

2- Index: Obtaining loans from banks of non-Islamic governments, Question 1679 (website: 1698).

3- Index: The ruling of getting interest from non-Muslims, Question 1048 (website: 1118).

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