Answer
(Fatwa: 935/789=D/1430)
Interest is haram in the eye of Shariah, whether it is business interest (as your father takes) or usury (in which a capitalist lends money at interest on fixed duration), both are haram. Allah has gone so far to declare war against those who do not leave interest in spite of it being unlawful. Obviously one daring to go to war with Allah will certainly bear dire consequences:
وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا
فَإِنْ لَمْ تَفْعَلُوا فَأْذَنُوا بِحَرْبٍ مِنَ اللَّهِ وَرَسُولِهِ
Some people influenced by the West think that business interest is ok, but it is absolutely wrong. The Hadith clearly forbids the same: نھی رسول اللہ صلی اللہ علیہ وسلم عن المخابرۃ
The dream is due to the effect of the interest, since abundant sins will cause burning in fire and Hell. Convince your father and convey him the commandments of Allah and His Messenger about interest, ask him to give the interest amount in charity to the poor without an intention of reward. He should seek forgiveness from Allah and should never abandon hopes in His mercy. Allah has prohibited us to despair Allah’s mercy, the Quran says: لا تَقْنَطُوا مِنْ رَحْمَةِ اللَّهِ, Allah says that He will forgive every sin except polytheism and infidelity (shirk and kufr).
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband