What is the ruling on depositing money in Islamic banks?

Question:
Is it permissible to place money in banks that declare themselves to be based on the Islamic system of Islamic profit-sharing (mudarabah), without our knowledge of where these funds are used or in what field the investment takes place? Many companies have now emerged that operate on the system of profit-sharing, but we do not know the extent to which their owners adhere to the Islamic system? Is it permissible?

Answer:
As long as they concern themselves with Islam and operate on the Islamic system in their profit-sharing, and those in charge of them adhere to Islam in what they have announced to Muslims, and nothing contrary to that has appeared, the default is to encourage Islamic transactions. May Allah keep you safe. It is not befitting for a person to harbor doubt in this matter and move from an Islamic bank to a riba (usury or interest) bank, or to undermine Islamic banks and move to riba banks. No, rather it is obligatory that Islamic banks be encouraged, supported, and cooperated with. When a defect appears in them, one should advise them and direct them to what is good. These are not infallible; they may make mistakes. But direct them to what is good, and learn from the scholars what you do not know; they will guide them so that you help them on their sound path, so that they fulfill their duty, and so that they compete with these evil riba banks until Allah makes the truth prevail over falsehood. As for a person being suspicious of this and that, and being influenced by the devil and the riba banks to discourage him, saying, "You see them doing such and such, and you see them doing such and such," to discourage him—this means destroying Islamic banks, weakening them, and eliminating their movement in the future. This is absolutely not befitting and is not permissible. But when one knows of their shortcoming, one advises them and directs them to what is good, and cooperation in righteousness and piety is obligatory.