Charitable organizations using interest to offset bank charges

Question:-

An institution has Zakaat and Fitrah funds in their account which includes cash.

My questions are:

1) Can the interest funds accrued in the Zakaat account be used to offset the bank charges?

2) The Fitrah was received as cash. Can the organization do an EFT to recipients (from other funds in their account) and use the cash amount for Zakaat recipients?

Answer:-

1. Interest funds cannot be utilized to offset bank charges. The recipients of interest funds are poor Muslims that are eligible for Zakaat, or poor non-Muslims. Hence, those depositing cash for their Zakaat or Fitrah should pay the bank charges as well, else their Zakaat or Fitrah will not be discharged in full, since the banks deduct their charges immediately. By using interest funds to pay the bank charges of the cash deposits will not be permissible since the donor or depositor will be benefitting from Haraam interest funds.

2. If the (Fitrah) funds are transferred via EFT to the Fitrah recipient whilst the cash is with the institute, then the Fitrah will be discharged. However, if the cash Fitrah funds are used first, and thereafter the organization transfers the funds into the recipient’s account via EFT, then the Fitrah will not be discharged. [Ahsanul Fataawa Pg.290 Vol.4 / Behishti Zewar Pg.245]

ALLAH TA’ALA KNOWS BEST!

ANSWERED BY:

Mufti Mohammed Desai

Date: 04 Shawwal 1444 / 25 April 2023