Banks

Mufti:

Alsayyed Muhammad b. Abdallah Awad Al-Muayyady

تاريخ النشر: January 16, 2026

Fatwa number: 20258

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Banks

Fatwa number: 20258

Question: Banks have become enmeshed in people’s lives, dealings, and commerce, and the need to transact with them has become pressing; yet what is obviously known is that they are usurious banks. Is there a lawful way by which a Muslim can be safe from the sin of usury and its tremendous warning? Or is there a substitute that can take the place of banks and fulfill their role in this age in accordance with the Islamic Sharia?

Answer: Usury (ribā) is a major crime in the religion of Islam, and Muslims can be safe from ribā as follows:
1. That the bank sells to borrowers paper currency in exchange for gold or silver after agreeing upon the price acceptable to both parties and upon the term; and the term must be a single fixed term. No increase is permissible if payment is not made at the specified due date.
This was the practice of our shaykh, the erudite scholar ʿAbd al-ʿAẓīm Ḥasan al-Ḥūthī—May Allah have mercy on his soul-one of the vessels of knowledge known for scrupulousness and caution, and among those who were careful to avoid entering into dubious matters.
2. The bank, to be safe from ribā, may take funds from its clients under a muḍārabah (silent-partnership) contract, in which the bank trades with the funds for a specified period; after the term ends, the profit is divided between the bank and the owner of the funds according to their agreement.
Source: Min Thimār al-ʿIlm wa al-Ḥikmah vol.2