Dealing with interest-based banks with intention of empowering Muslims

Fatwa Date : Rabee' Al-Aakhir 3, 1437 / 14-1-2016

Question
Assalaamu alaykum. I live in a secular country although about 60% of the populat
ion consists of Muslims. Interest is haram! The majority of our banks are intere
st based. If we, the Muslims, do not do busines (invest and conduct day-to-day b
usiness) with them, then the non-Muslims will control the economy, to our detrim
ent, and likewise with the capital market. What is the way out for us Muslims in
this country? In these circumstances, can a Muslim invest in the banks and trad
e in their shares in the capital market? What should a Muslim do with the divide
nd paid to him by banks and companies quoted in the capital market? Wassalaam.
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is
none worthy of worship except Allaah and that Muhammad sallallaahu `alayhi w
a sallam ( may Allaah exalt his mention ) is His slave and Messenger.
The lawful forms of investment are not confined to the transactions with interes
t-based banks or trading in prohibited shares in the capital market; however, th
e devil beautifies the unlawful, threatens with the prospect of poverty, and enj
oins immorality. Allaah, The Exalted, says (what means): {Satan threatens you wi
th poverty and orders you to immorality, while Allaah promises you forgiveness f
rom Him and bounty. And Allaah is all-Encompassing and Knowing.} [Quran 2:268] V
erily, there is no blessing in prohibited earnings, and whoever lives on unlawfu
l earnings incurs his own destruction if Allaah does not confer His mercy and gr
ace upon him (guiding him to repentance).
As long as the Muslims make up the majority of the population, then they can imp
ose their terms on the banks and markets because the main concern of the traders
is making profit. Were the Muslims, who make up the majority of the population,
to boycott these banks and abstain from engaging in the prohibited activities a
nd investments, then the traders and banks would comply with their terms because
their main objective is to make profit. In fact, this was the situation in many
Muslim countries, but when the capital providers found Muslims refraining from
partaking in dealing with interest and prohibited transactions, they opened Isla
mic banks and provided takaaful (Islamic cooperative) insurance based on the sha
ree'ah and the like of Islamic transactions.
Hence, seek earning a living through lawful means and honor your religion until
your demands are met instead of compromising it and blindly following others. Al
laah, The Exalted, says (what means): {So do not weaken and do not grieve, and y
ou will be superior if you are (true) believers.} [Quran 3:139]
The honor and dignity of Muslims is based on their adherence to the Book of Alla
ah and the Sunnah of His Messenger sallallaahu `alayhi wa sallam ( may Alla
ah exalt his mention ) and abidance by the teachings of Islam in their lives as
due. Umar ibn Al-Khattaab may Allaah be pleased with him said, "We were a p
eople who lived in humiliation and then Allaah gave us honor through Islam; were
we to seek honor through anything other than Islam, Allaah would humiliate us o
nce again." Imaam Maalik may Allaah have mercy upon him said, "The latter
part of this ummah (nation) will not be rectified except by what rectified its f
ormer part."
Hence, if you seek honor and dignity, then honor your religion; Allaah, The Exal
ted, says (what means): {And if you fear privation, Allaah will enrich you from
His bounty if He wills. Indeed, Allaah is Knowing and Wise.} [Quran 9:28]
As for buying shares in the usurious banks and investing money in them, it is pl
ainly forbidden and the Muslim must avoid it. Please, refer to fataawa 88694 and

90054.
The ruling on share profits depends on the nature of the shares; if the shares a
re prohibited, then the profits gained are prohibited as well and the Muslim mus
t dispose of them by spending them in charity for the poor and needy or for the
general benefit of the Muslims. However, if the shares are lawful, such as is th
e case with the shares of the companies whose activities are lawful and who do n
ot deal in interest in all its forms, taking loans or lending out loans with int
erests; in such case, there is no harm in buying shares in such companies and av
ailing oneself of the profits gained through this investment.
Allaah knows best.