Auditing and reviewing the accounts of interest-based banks
Machine translationRead the Arabic original
Fatwa No. ( 21564 )
Q: Commercial banks have become a necessity of the global economy and have spread throughout Islamic and non-Islamic countries, and dealing with them has become common among everyone in various fields.
Commercial banks have been present in the Kingdom of Saudi Arabia like in other countries, and the state has issued a system for them called the (Bank Supervision System) and entrusted the Saudi Arabian Monetary Authority with the task of supervising them and following up on their operations. Among the most prominent of these operations are the following: 1 - Accepting money as current or fixed deposits. 2 - Opening current accounts, opening credits, issuing letters of guarantee, and collecting checks, orders, or exchange permits, and other documents of value. 3 - Discounting bills of exchange and other commercial papers. 4 - Foreign exchange operations. 5 - Investing in projects and companies within the Kingdom (within 20% of capital). 6 - Trading in company shares for the benefit of the bank and for the benefit of others. All of these previous operations fall under the name of banking operations, some of which are tainted with riba; such as fixed deposits and some direct monetary investments. Whoever follows the balance sheets of the banks present within the Kingdom will find that they
tainted with the suspicion of riba, and many of my colleagues in the profession do not accept auditing banks for this reason. Therefore, the task of auditing banks has been limited to four mixed accounting firms (composed of foreign companies and some Saudi partners licensed to practice the profession). The negative impact of the entry of these foreign companies into this field is not hidden, nor is the opportunity it provides them to get to know the economic and financial conditions of the country, considering that banks are among the most important financial institutions that provide accurate information about the country's economic situation and the resulting harms that are not hidden from every sincere patriot. If the task of the accountant is to audit the banks and verify that the financial transactions have been carried out in accordance with the bank's internal regulations, and in accordance with the general systems that govern their operations, and the accountant has no say in making any decision in completing any banking transaction, but his task is only to verify that what was done is in accordance with the systems and regulations; that is, the accountant's position differs from that of the bank employee who directly handles banking operations and contributes to their completion according to his job level in the bank - is auditing the accounts of banks in the manner previously mentioned considered
are tainted with the suspicion of riba, and many colleagues in the profession do not accept auditing banks for this reason. Therefore, the task of auditing banks has been limited to four mixed accounting firms (composed of foreign companies and some licensed Saudi partners). The negative impact of the entry of these foreign companies into this field is not hidden, nor is the opportunity they are given to learn about the economic and financial conditions of the country, considering that banks are among the most important financial institutions that provide accurate information about the country's economic situation and the resulting harms that are not hidden from every sincere patriot. If the task of the auditor is to audit banks and verify that financial transactions have been carried out in accordance with the banks' internal regulations and the general systems governing their operations, and the auditor has no role in making any decision in completing any banking transaction, but his task is only to verify that what was done is in accordance with the systems and regulations; meaning that the auditor's position differs from that of a bank employee who directly handles banking operations and contributes to their completion according to his job level in the bank - is auditing bank accounts in the manner previously mentioned considered
among the works forbidden by the Shari'ah? And is the auditor included among those mentioned in the noble hadith which states the following:Sahih Muslim 1598 or as the Messenger of Allah (peace and blessings be upon him) said. I hope that a clear opinion will be issued on this issue that combines the requirements of public interest and the pure Shari'ah. We ask Allah to show us the truth as truth and provide us with the means to follow it, and to show us falsehood as falsehood and provide us with the means to avoid it. He is the All-Hearing, the Responsive.
A: Auditing and reviewing the accounts of interest-based banks is not permissible; because it is cooperation in sin and aggression, and Allah (Glorified and Exalted is He) says:[Al-Ma'idah 5:2] The prevalence of evil does not in any way mean its permissibility or the seeking of justifications for it to make it acceptable among Muslims, so the obligatory thing is to stay away from it and to advise the owners of interest-based banks to abandon opposing Allah and His Messenger, and in the permissible there is sufficiency from the forbidden, and whoever leaves something for the sake of Allah, Allah will replace it with something better.
And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: Commercial banks have become a necessity of the global economy and have spread throughout Islamic and non-Islamic countries, and dealing with them has become common among everyone in various fields.
Commercial banks have been present in the Kingdom of Saudi Arabia like in other countries, and the state has issued a system for them called the (Bank Supervision System) and entrusted the Saudi Arabian Monetary Authority with the task of supervising them and following up on their operations. Among the most prominent of these operations are the following: 1 - Accepting money as current or fixed deposits. 2 - Opening current accounts, opening credits, issuing letters of guarantee, and collecting checks, orders, or exchange permits, and other documents of value. 3 - Discounting bills of exchange and other commercial papers. 4 - Foreign exchange operations. 5 - Investing in projects and companies within the Kingdom (within 20% of capital). 6 - Trading in company shares for the benefit of the bank and for the benefit of others. All of these previous operations fall under the name of banking operations, some of which are tainted with riba; such as fixed deposits and some direct monetary investments. Whoever follows the balance sheets of the banks present within the Kingdom will find that they
tainted with the suspicion of riba, and many of my colleagues in the profession do not accept auditing banks for this reason. Therefore, the task of auditing banks has been limited to four mixed accounting firms (composed of foreign companies and some Saudi partners licensed to practice the profession). The negative impact of the entry of these foreign companies into this field is not hidden, nor is the opportunity it provides them to get to know the economic and financial conditions of the country, considering that banks are among the most important financial institutions that provide accurate information about the country's economic situation and the resulting harms that are not hidden from every sincere patriot. If the task of the accountant is to audit the banks and verify that the financial transactions have been carried out in accordance with the bank's internal regulations, and in accordance with the general systems that govern their operations, and the accountant has no say in making any decision in completing any banking transaction, but his task is only to verify that what was done is in accordance with the systems and regulations; that is, the accountant's position differs from that of the bank employee who directly handles banking operations and contributes to their completion according to his job level in the bank - is auditing the accounts of banks in the manner previously mentioned considered
are tainted with the suspicion of riba, and many colleagues in the profession do not accept auditing banks for this reason. Therefore, the task of auditing banks has been limited to four mixed accounting firms (composed of foreign companies and some licensed Saudi partners). The negative impact of the entry of these foreign companies into this field is not hidden, nor is the opportunity they are given to learn about the economic and financial conditions of the country, considering that banks are among the most important financial institutions that provide accurate information about the country's economic situation and the resulting harms that are not hidden from every sincere patriot. If the task of the auditor is to audit banks and verify that financial transactions have been carried out in accordance with the banks' internal regulations and the general systems governing their operations, and the auditor has no role in making any decision in completing any banking transaction, but his task is only to verify that what was done is in accordance with the systems and regulations; meaning that the auditor's position differs from that of a bank employee who directly handles banking operations and contributes to their completion according to his job level in the bank - is auditing bank accounts in the manner previously mentioned considered
among the works forbidden by the Shari'ah? And is the auditor included among those mentioned in the noble hadith which states the following:
Allah's Messenger (ﷺ) cursed the accepter of interest and its payer, and one who records it, and the two witnesses
لعن الله آكل الربا وموكله وكاتبه وشاهديهA: Auditing and reviewing the accounts of interest-based banks is not permissible; because it is cooperation in sin and aggression, and Allah (Glorified and Exalted is He) says:
And cooperate in righteousness and piety, but do not cooperate in sin and aggression. And fear Allah; indeed, Allah is severe in penalty.
وَتَعَاوَنُوا عَلَى الْبِرِّ وَالتَّقْوَى وَلاَ تَعَاوَنُوا عَلَى الإِثْمِ وَالْعُدْوَانِ وَاتَّقُوا اللَّهَ إِنَّ اللَّهَ شَدِيدُ الْعِقَابِAnd success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.