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Wednesday, January 14, 2015

Depositing Money Into Bank Accounts Supports Ribaa

Shaykh ‘Abdur-Rahmaan bin Naasir al-Barraack [may Allaah Preserve him] was asked:

Is depositing (الإيداع) money into our bank accounts actually a deposit or is it considered as a loan (القرض) because the actual money given to them is then used by the bank?

He answered:

Yes, depositing money into bank accounts has the same ruling as loans. Meaning, it is not a deposit that has been defined by the scholars of al-Fiqh. They differentiated in the rulings that revolve around depositing or safe-keeping and loans.

So if a person gives you something but the actual physical asset is used up and then later paid back by using something else, then this is a loan.

A deposit with the scholars of al-Fiqh is something given for safe-keeping and the actual physical asset is returned untouched.  

Based on this, crediting money into bank accounts are considered as loans because the physical money is then used by the bank and not returned to its owner (TN: therefore mere ‘depositing’ money into bank accounts is a form of generating interest).


Shaykh ‘Abdul-‘Azeez bin Baaz [may Allaah have Mercy on him] issued a Fatwaa stating that it is permissible to leave money in bank accounts if one fears for his wealth and they have no other place to keep it safe. 

He stated:

There is no harm in someone depositing their money in an interest-based bank as long as he is not gaining or paying any interest, if there is a fear for his wealth, out of necessity.

However, if he is able to invest his money without being harmed by doing so, or he is able to place his money in a bank that does not deal in interest, then this is what is obligatory upon him so that interest and interest-based banks are not supported.

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