Home » Shafi'i Fiqh » Darul Iftaa Jordan » It is Forbidden to Deposit and Invest Money in Usurious Banks

It is Forbidden to Deposit and Invest Money in Usurious Banks

A certain sum of money (In euros, dollars, and dinars) was deposited in one of the usurious banks for investment and collecting the profits on monthly basis, but this continued for years. Later on, this same amount was withdrawn from the usurious bank and deposited in the Jordan Islamic bank. What is the ruling of Sharia on this? While deposited in the usurious bank, how should the Zakah of this amount be calculated?

Answer:

All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon Prophet Mohammad and upon all his family and companions.

It is forbidden to invest funds in usurious banks and whatever profit results from that is forbidden usury. The best way out of this is distributing the usurious amounts among the poor and needy. This is attested to in the verse where Almighty Allah says (What means), " O ye who believe! Fear God, and give up what remains of your demand for usury, if ye are indeed believers."{Al-Baqarah, 278}.

As for investing in usurious banks, We (Iftaa` Department) have already clarified that in Fatwa No. (729). 

As for giving the Zakah of these amounts, it is obligatory to give Zakah due on the sums deposited in usurious and Islamic Banks. This is provided that the sums have reached Nisaab (Minimum amount liable for Zakah while possessing it)-which is the value of 85 g. of 24 carat gold-and a full lunar year elapsed over possessing that Nisaab. (2.5%) must be given as Zakah for each past year in which these two conditions were met. And Allah the Almighty knows best

This answer was collected from the official government Iftaa Department of Jordan.

Read answers with similar topics: