Q: 1. Is it permissible for an Islamic organisation to rent/lease their property out to a bank?
2. If not, and its already leased out, what is the way forward?
A: It is not permissible for Muslims to lease premises to a bank. This falls under the Quranic prohibition of aiding and abetting sin. In this case, it is the sin of ribaa.
If premises were already leased to the bank then, firstly, an attempt should be made to cancel the lease. The organisation should consult with its attorneys to see if this is possible, though with banks it might be difficult to do this. So if this is not possible then the next thing to do is to inform the bank that its lease will not be renewed once it expires. Thereafter rental received from the bank should not be used for Musjid or madresa. Instead the organisation should spend it on welfare and social work, such as feeding schemes for the poor, grants to the poor and needy, food parcels, blankets, even bursaries for poor students, etc.
Allah Ta’ala knows best
Mufti Siraj Desai