Loans from Riba-Based Banks
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The first question of Fatwa No. ( 20420 )
Q1: I am a member of the armed forces in the National Guard, and I receive my salary through Al-Rajhi Bank. Is it permissible for me to transfer my salary to another bank that offers bank loans with specific interest rates? This is because I borrow a specific amount of money from one of these banks, for example (100,000 riyals). The bank hands this amount to me, but on the condition that I transfer my salary to this bank. The bank then deducts a specific portion of the salary each month in exchange for this loan until the entire amount is repaid. However, it does not calculate the amount as (100,000 riyals), but rather
it takes interest on it and calculates it, for example, as (110,000 riyals). Is this action permissible? Please issue a ruling on this, may Allah preserve you and protect you, and guide your steps to all that is good. And peace be upon you, and Allah’s mercy and blessings.
A1: This transaction is explicit, forbidden riba (usury or interest) prohibited by the Qur’an, the Sunnah, and scholarly consensus. Therefore, it is not permissible to engage in it. You must not enter into it, and you should beware of what Allah has forbidden, in obedience to Allah and His Messenger (peace and blessings be upon him). And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q1: I am a member of the armed forces in the National Guard, and I receive my salary through Al-Rajhi Bank. Is it permissible for me to transfer my salary to another bank that offers bank loans with specific interest rates? This is because I borrow a specific amount of money from one of these banks, for example (100,000 riyals). The bank hands this amount to me, but on the condition that I transfer my salary to this bank. The bank then deducts a specific portion of the salary each month in exchange for this loan until the entire amount is repaid. However, it does not calculate the amount as (100,000 riyals), but rather
it takes interest on it and calculates it, for example, as (110,000 riyals). Is this action permissible? Please issue a ruling on this, may Allah preserve you and protect you, and guide your steps to all that is good. And peace be upon you, and Allah’s mercy and blessings.
A1: This transaction is explicit, forbidden riba (usury or interest) prohibited by the Qur’an, the Sunnah, and scholarly consensus. Therefore, it is not permissible to engage in it. You must not enter into it, and you should beware of what Allah has forbidden, in obedience to Allah and His Messenger (peace and blessings be upon him). And 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.