Monday, November 20, 2017 - 2 Rabi' al-Awwal 1439

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Home » Fatwas » Financial Transactions » Modern Transactions

Benefitting from Interest

I deposited a sum of money in the bank some years back and I received interest on it. Is it legally permissible to benefit from the interest or it is prohibited?

Answer

There is a disagreement among scholars in the modern age on how they conceive the nature of interest generated from banks.
Deposits into banks are considered a new form of finance contracts; they are not loans which generate prohibited interest. These contracts have nothing to do with usury [riba].
According to the opinion approved and implemented by verifiers, it is permissible to bring in new forms of contracts if they are free of risk and harm.
This is the opinion implemented by the Egyptian Banking Law No. 88 for the year 2003 and its executive regulations issued in 2004.
The decree of the ruler lifts the disagreement with regard to banking issues. Therefore, the interest is lawful since it is not generated from prohibited loans. Rather, it is profit generated from these contracts, which achieve benefit for those involved. Based on this, it is permissible in the Shari’ah to take and benefit from it.
 

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