What is the ruling on dealing with Islamic banks?

The questioner : We want to ask our Shaykh; regarding the bank, dealing with banks, especially the Islamic bank.

The Shaykh : People ask about the bank and banks more than anything else...!
My brother, the Islamic bank is perhaps better than the other banks, but that does not mean it is an Islamic bank, and there is nothing strange about that; because where does this Islamic bank exist? In the Islamic society. What do you think of the Islamic society?

The questioner : ... .

The Shaykh : [The Shaykh laughs!]
So, it has a share of the name, both in what is correct and what is wrong. The Islamic society has what is correct and what is wrong, what is true and what is false. The least thing that does not need discussion, because there are issues that require some research and precise discussion, is that the thing that does not accept discussion is if we asked the Islamic bank where its money is kept? It will tell you: it is kept in another bank. So, it deals with the other banks. Therefore, the chain here becomes linked to an impermissible act; that is, if the Islamic bank’s dealings with those it deals with were one hundred percent Islamic, it would still be built upon a defective act, which is its dealing with the other banks, depositing money in the other banks, perhaps in the central bank, for example.

The questioner : ... .

The Shaykh : The clear thing is that the Islamic bank, considering that it deposits its money in another bank, is sufficient to say that it does not bear the name, meaning: it is not an Islamic bank. But the reality, which is more important than this, is that the same Islamic bank deals in transactions that are greatly questionable regarding some of the Prophetic hadith texts.
The questioner: May Allah have mercy on you.

Another questioner : May Allah guide us and rectify your affairs.

The Shaykh : Here, for example, they act as intermediaries between the customer and the merchant. They buy from the merchant for him at a price, instead of lending him money so he can buy what he needs. They buy it for him and take the difference between the cash price and the installment price. They call it a commission, but the reality is that a commission, in the understanding of all people, is a wage for work a person performs. But here, the bank does nothing except pay the company four thousand, for example, and they collect four thousand and seven hundred from the buyer, five hundred according to what they agree upon. It is the same process that the merchant uses when he differentiates between the cash price and the installment price. Instead of the merchant taking the installment difference, the bank takes it, perhaps at a lower rate than the company’s rate, otherwise they would not make a profit for people... This is a type of riba (usury or interest) that our Messenger (peace and blessings be upon him) specified in the authentic hadith where he said: . This hadith is explicit that selling one item at two prices, with a difference in price between the cash sale and the installment sale, is considered the increase, which corresponds to the installment, to be riba. He said (peace be upon him): , two sales in one sale, and he has the worst of them, meaning the lower of the two prices, or the riba, which is the increase. Other hadiths came explaining two sales in one, as in "Musnad al-Imam Ahmad" from the narration of Sammak ibn Harb from Abdullah ibn Mas'ud, who said: "The Messenger of Allah (peace and blessings be upon him) prohibited two sales in one." It was said to the narrator of the hadith, Sammak ibn Harb: What are two sales in one? He said: "That you say: I sell you this for cash at such a price, and on credit at such a price." I sell you this recorder for cash for one hundred, and on installment for one hundred and a dinar. The dinar here, regarding the first hadith, is an increase of riba. Therefore, in each of the two hadiths, there is a benefit not found in the other. From the combination of them, we derive a very important result in this hadith: the explanation of two sales in one matches exactly the dealing that exists today. The car is four thousand cash, four thousand and five hundred on installment; this is what the Messenger (peace be upon him) prohibited in the hadith of Ibn Mas'ud. The first hadith, which is from the hadith of Abu Hurayrah, considered the increase to be riba and said: ; meaning: he has the lower of the two prices: if he takes the increase.
So, this merchant who sold on installment, if he remembers and hears the news of the hadith of the Messenger (peace and blessings be upon him), he must stop, as is the explicit command in the Qur'an: . If he sold for four hundred cash and four hundred and fifty on installment, and started to install it; we must not take a single qirsh from the four thousand. If he sold for four thousand cash and four thousand and five hundred on installment, he must take only four thousand from him. If he takes an increase of a qirsh, it is riba. This is one of the transactions performed by the Islamic bank.
And there are other things; for example, a man comes wanting to buy a machine from Europe, so they agree with him on a price for a specified term, let it be, for example, one year. If the buyer says: I cannot pay until after two years, the value doubles. This is an established transaction involving the bank. Besides that, there is a third transaction that reached us where they partner with a man in building, for example, a structure or building on land from his money. They partner with him in a way that they first take what is owed to them, and secondly, they partner with him in the rental of the place. So, they are not partners with him in a mudarabah (profit-sharing partnership), nor are they doing a favor to the landowner by lending him a good loan. Meaning, there are matters that are very clearly contrary to the Shari'ah. But we must say the truth; they do not lack finding fatwas (scholarly legal rulings) permitting some of these things. But the problem is that fatwas often conflict based on the differences of the madhahib (schools of jurisprudence). And we know that in many issues that have afflicted the general public, there are two or three opinions. So, a person does not lack choosing from these opinions what he desires; because every one of these opinions was said by an imam from the imams of the Muslims.
Let us give an example from the reality of all Muslims, those who pray, naturally; it is known that in the issue of blood coming out, whether it invalidates the wudu' (the ablution for prayer) or not, there are three opinions, three madhahib; the madhhab of Imam al-Shafi'i is that it does not invalidate at all, whether it is much or little. The madhhab of Malik and Ahmad is that it invalidates if it is much, and does not invalidate if it is little. The madhhab of Abu Hanifa is that it invalidates even if it is the amount of a thousand. If one is... living by my madhhab from one side, and holding to the madhhab of Abu Hanifa from another side; if he hears the opinion of Imam al-Shafi'i, he will say: By Allah, this is easier for us. He takes this opinion and prays. So, his prayer is not valid, neither according to the madhhab of Abu Hanifa nor according to the madhhab of al-Shafi'i. Why? Because he will collide with the madhhab of al-Shafi'i in another branch, in another issue. For example, Imam al-Shafi'i says that reciting al-Fatihah (Surat al-Fatihah) behind the imam is a condition, and the Hanafi says to you: it is not permissible, he must remain silent. So, if he recites, he invalidates the prayer according to the madhhab of Imam al-Shafi'i, which he followed in the issue of blood. And if he does not recite, he contradicts the Hanafi madhhab, which he is living by. So, it ends up, as they say: "in a mess"; and this is the state of taqlid (following a scholar without knowing his evidence), rather, it is the state of talfiq (mixing rulings from different schools).
Taqlid is following an imam or a school of jurisprudence from the schools followed today. Talfiq is taking from each school whatever one desires. The transactions taking place today in the Islamic bank, as well as in rulings on personal status and other matters, are all done in this manner. Some of the imams of the Salaf, such as Imam Malik, said: “The correct opinion is one”; meaning, among the differing opinions. “If you take all the opinions, you have gathered all the evil”; because as long as the correct opinion is one, you are taking from here and taking from there. What does that mean? It is like what was said about the poet Abu Nuwas—I do not memorize it, naturally—he said: “If they forbid us the drink, we will answer with a fatwa from the Hanafi school, and if they forbid us the entertainments and songs, we will answer with a fatwa from the people of Hijaz,” and so on, they move from one to another. Or these people of desires move from one issue to another... They must find someone to issue a fatwa for them with some of the opinions existing in some of the schools. It is not reasonable for them... to issue a fatwa for themselves; no, they will find a fatwa. But the important thing is that Islam is not “so-and-so said this and so-and-so said that.” This is a major problem today in the Muslim society, and people are in great ignorance about it, even the specialists among scholars, doctors, and recent graduates. Because Islam, as Ibn al-Qayyim (may Allah have mercy on him) says:
“Knowledge is: Allah said, His Messenger said, *** The Companions said; it is not deception.
Knowledge is not your foolishness in setting up disagreement *** Between the Messenger and the opinion of a jurist.
No, nor denying the attributes and negating them, *** Out of fear of denial of the divine attributes and likening Allah to creation."
So knowledge is: Allah said, the Messenger of Allah said, in the first rank. The second rank is: his Companions said.
Today, these fatwas are never issued in light of this methodology. They are not issued on the basis of “Allah said, the Messenger of Allah said,” but rather “so-and-so said, such-and-such a school said.” Then they support this departure and this deviation from this correct scientific methodology with a phrase that many people think is a Prophetic hadith raised to the Messenger (peace be upon him), but it has no basis, neither in his words nor in the words of any other of the mujtahid imams. That phrase is their saying: “Whoever follows a scholar will meet Allah in safety”... While our Lord (Mighty and Majestic) says in the clear Qur'an: , and this condition contains a severe warning in reality; because its meaning is: if you do not believe in Allah and the Last Day, do not do this. , so this scientific methodology today leads to very serious disagreements among Muslims in their dealings with one another in their contracts, in their marriages, in their divorces, and Islam as a whole is like this. For example, today you find many muftis and judges ruling on the marriage of tahil, which is called in some colloquial languages the marriage of “tajhishah”!! They permit this despite the saying of the Messenger (peace be upon him): . Of course, there are those who say this marriage is permissible despite this authentic hadith. The ijtihad of some scholars that conflicts with this text should be annulled. The one who performed the ijtihad is excused; because he is a mujtahid, and because the Prophet (peace and blessings be upon him) said: . But this person who is rewarded with one reward, it is not permissible to take his opinion as a school of jurisprudence, and it is not permissible to make his erroneous opinion a religion to be followed, while turning away from the explicit saying of the Messenger (peace and blessings be upon him) that contradicts it.
And the very sad truth is that there are some jurisprudential opinions of the later scholars that are very dangerous, and their danger is manifested in... those who follow this traditional jurisprudence, where one of them says that the four schools are like four shari'ahs; so whichever shari'ah a person takes, he is on the right path. And from this came that phrase we denied earlier: “Whoever follows a scholar will meet Allah in safety.” Then branching out from that is adopting any opinion, no matter how far it is and how it contradicts the Book and the Sunnah; such as this marriage of tahil, and on that basis, the permissibility of entertainments—for example—and musical instruments and music, which has spread throughout the lands and overflowed, and there is no home without music and the flute of Satan day and night.
Of course, this is not only following the desires of the common people; these are desires rejected by the fatwas of the scholars. No, they are supported by this path that deviates from following the Book and the Sunnah toward talfiq. For example, Ibn Hazm, the Zahiri, has a treatise on the permissibility of entertainments. For this reason, some of the Islamic writers today wrote a fatwa regarding a British Muslim, who was, of course, a Christian like the common British people, then Allah guided him and he became a Muslim. He is one of the major famous singers, who has tapes and recordings and receives a great deal of money from that. So when he became a Muslim, it was as if he heard or read that singing and musical instruments are forbidden in Islam, so he stopped. But perhaps some of the sincere, good Muslims drew his attention to the fact that the money coming to you now is from that evil profession... So he was answered with contemporary fatwas that there is no objection to using or benefiting from this money that comes to him based on the old recordings; because there is no definitive text forbidding musical instruments.

Another questioner: Yes.

The Shaykh : There is no definitive text. And when he says: there is no definitive text, he contradicts his own principles that he adopts; because one of his scientific principles is that the rulings of the Shari'ah do not necessarily have to be based on texts that are definitive in establishment and definitive in meaning, in the expression of the jurists. It is sufficient for the texts to be probable in establishment and probable in meaning. And if they are probable in meaning and definitive in establishment, that is better. Or if they are probable in establishment and definitive in meaning, that is better. But if both conditions are met, definitive in establishment and definitive in meaning, then there is nothing better than that. Nevertheless, this newly guided Muslim was issued a fatwa that contradicts the four schools, which are based on the evidences of the Shari'ah, on the claim that there is no definitive text. They mean by definitive text the mass-transmitted report, like the Noble Qur'an, for example. Knowing that Ibn al-Qayyim al-Jawziyyah (may Allah have mercy on him) and others have researches and treatises on the prohibition of musical instruments, and evidence is cited for that from the Qur'an as well, in addition to the Sunnah; until they interpreted His saying (Glorified and Exalted is He): “” with “”.
Yes?

The Shaykh, lahw al-hadith is singing and musical instruments. Despite this, such fatwas are issued, and whoever is guided by them goes astray. This is the problem of problems.
Okay; we are done with the topic... What do you have?