Interest-Based Banks, Their Danger, and the Warning Against Them
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Question:
It is not hidden from you that the banks existing now are interest-based, and they deal in riba (usury or interest) inside the Kingdom and outside it. A portion of their capital has been made available to citizens as investment, and according to the knowledge of some people, it is halal (lawful). So, before Allah, you must clarify this so that people are fully aware of it. Since every person who wants goods from abroad cannot obtain them except through the existing banks, why are there not Islamic banks that deal in this manner?
Answer:
All interest-based banks are forbidden (muharram), and one must not deal with them. Rather, they must be boycotted, and one must not deal with them because dealing with them involves cooperation in sin and aggression. We have published this in the private newspapers more than once, and others have published it as well. The clarification of the prohibition of riba (usury or interest) is, by the praise of Allah, clear in the great Qur'an and the pure Sunnah.
There is no doubt that our warning against riba (usury or interest) is obligatory. So, the people of knowledge must always warn against riba (usury or interest) and explain to people that it is one of the major sins, that it is a great danger, and that it is among the causes of general punishments. The appearance of riba (usury or interest), zina (unlawful sexual intercourse), khamr (intoxicants), ghibah (backbiting), namimah (talebearing), 'uquq (undutifulness to parents), cutting off family ties, and similar sins are all among the causes of general punishments—we seek refuge in Allah. So, one must be cautious of that, and every Muslim must be cautious of that.
We ask Allah to facilitate the establishment of Islamic banks soon. The state—may Allah guide it—has promised this thing, the establishment of Islamic banks and the existence of Islamic institutions that would suffice in place of interest-based banks. We hope that this will begin soon, if Allah wills, so that these interest-based banks are eliminated, or Allah guides them so that they return to the right path.
It is not hidden from you that the banks existing now are interest-based, and they deal in riba (usury or interest) inside the Kingdom and outside it. A portion of their capital has been made available to citizens as investment, and according to the knowledge of some people, it is halal (lawful). So, before Allah, you must clarify this so that people are fully aware of it. Since every person who wants goods from abroad cannot obtain them except through the existing banks, why are there not Islamic banks that deal in this manner?
Answer:
All interest-based banks are forbidden (muharram), and one must not deal with them. Rather, they must be boycotted, and one must not deal with them because dealing with them involves cooperation in sin and aggression. We have published this in the private newspapers more than once, and others have published it as well. The clarification of the prohibition of riba (usury or interest) is, by the praise of Allah, clear in the great Qur'an and the pure Sunnah.
There is no doubt that our warning against riba (usury or interest) is obligatory. So, the people of knowledge must always warn against riba (usury or interest) and explain to people that it is one of the major sins, that it is a great danger, and that it is among the causes of general punishments. The appearance of riba (usury or interest), zina (unlawful sexual intercourse), khamr (intoxicants), ghibah (backbiting), namimah (talebearing), 'uquq (undutifulness to parents), cutting off family ties, and similar sins are all among the causes of general punishments—we seek refuge in Allah. So, one must be cautious of that, and every Muslim must be cautious of that.
We ask Allah to facilitate the establishment of Islamic banks soon. The state—may Allah guide it—has promised this thing, the establishment of Islamic banks and the existence of Islamic institutions that would suffice in place of interest-based banks. We hope that this will begin soon, if Allah wills, so that these interest-based banks are eliminated, or Allah guides them so that they return to the right path.
Source
binbaz.org.sa
The Arabic text is copied verbatim from the original source, without any edits.