Disposing Of Interest Funds

Jul 24, 2024 | Banking/ Interest, Uncategorized

Q1) I keep my money in a commercial bank account. Recently, the bank started paying me interest since a positive balance is maintained. Is it necessary for me to switch to a non-interest bearing account?

A1) Yes, if you have an option of keeping your money in a non-interest bearing account, then you should do so. However, since you already have a bank account, it is not necessary to change to a non-interest bearing account with the proviso that the interest will be withdrawn on a monthly basis (with certainty) and handed over to the correct recipients. If there is a fear of negligence in this matter, then it will be better to open a non-interest bearing account.

Q 2) How should I dispose of the interest money? Would it be permissible to donate the money to an Islamic organization after which the funds can be used for the purposes of a Madrassah, etc?

A2) If the Madrasah is prepared to dispose of the interest funds on your behalf to the correct recipients, then handing the funds over to them will be in order. However, you should bear in mind that there is no reward for disposing of interest funds even though the Madrasah may be discharging it on your behalf, as the funds are Haraam, which is Waajib to discharge in charity. The funds cannot be used by the Madrasah for their running expenses or projects.

قَالَ عُلَمَاؤُنَا إِنَّ سَبِيلَ التَّوْبَةِ مِمَّا بِيَدِهِ مِنَ الْأَمْوَالِ الْحَرَامِ إِنْ كَانَتْ مِنْ رِبًا فليردها على من أربى عليه، ومطلبه إِنْ لَمْ يَكُنْ حَاضِرًا، فَإِنْ أَيِسَ مِنْ وُجُودِهِ فَلْيَتَصَدَّقْ بِذَلِكَ عَنْهُ (الجامع لأحكام القرآن الكريم للقرطبي 3/366)

ويردونها على أربابها إن عرفوهم، وإلا تصدقوا بها لأن سبيل الكسب الخبيث التصدق إذا تعذر الرد على صاحبه (الدر المختار و حاشية ابن عابدين 6/385(

Q 3) If the above is not permissible, can I then do an EFT of the amount to my helper’s bank account? Please also advise if the money should be withdrawn and given away, or if it’s permissible to donate it via an EFT?

A3) If one’s helper is poor, then it may be given to her via EFT from the interest-bearing account. One may also withdraw the interest from the account and give the helper the cash. However, one should not expect any additional work or favours from one’s helper in lieu of the interest funds.

وَذكر أهل التَّفْسِير أَن الْخَبيث وَالطّيب فِي الْقُرْآن على ثَلَاثَة أوجه: أَحدهَا: الْخَبيث الْحَرَام وَالطّيب الْحَلَال، وَمِنْه قَوْله تَعَالَى فِي سُورَة النِّسَاء: {وَلَا تتبدلوا الْخَبيث بالطيب}.(نزهة الأعين النواظر في علم الوجوه و النظائر 1/270)

ALLAH TA’ALA IN HIS INFINITE KNOWLEDGE KNOWS BEST!

ANSWERED BY:

Maulana Abdul Kader Fazlani

Date: 17 Muharram 1446 / 24 July 2024

CHECKED AND APPROVED BY:

Mufti Mohammed Desai

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