Can Muslims Deal in Riba With Non-Muslims?

26 February, 2020
Q I live in a non-Muslim country and I can't carry out my work except through banks that charge interest. I was told that Riba with non-Muslims is permissible, is that true?


In the Name of Allah, Most Gracious, Most Merciful. 

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

In this fatwa:

A Muslim’s acts should conform to the Islamic law, as regards what is permissible and what is prohibited whether he is in an Islamic or non-Islamic state, since the positive laws, does not alter the rules of Allah.

A Muslim is not allowed to deal in riba with non-Muslims.

Responding to your question about dealing in riba with non-Muslims, Sheikh Atiyyah Saqr, the late head of Al-Azhar Fatwa Committee, states:

It is controversial among scholars whether non-Muslims have to abide by the subsidiary rules of the Shariah or not. According to that, some scholars have stated that the citizens of Muslim countries must all abide by the rules of the Shariah whether they are Muslims or non-Muslims, because it is possible to apply the Shariah in Muslim countries.

If a Muslim or a non-Muslim living under the protection of an Islamic state travels to a non-Muslim state and breaks any of the rules of the Shariah, then the Islamic law cannot be applied on him because in this case a Muslim judge will not have jurisdiction in the place where the breach was committed.

The same thing is true if that person returns to a Muslim country after committing such a breach.

It is reported that Imam Abu Hanifah (may Allah rest his soul in peace) stated that it is permissible for Muslims or non-Muslims living under the protection of an Islamic state to deal in riba with a warring non-Muslim.

In that case, both sides would have agreed on wasting money on interest besides wasting the money of a warring non-Muslim is permissible because his money and blood have no sanctity.

Abu Yusuf quotes Abu Hanifah as saying: “For laws to be enforced, they should be known to everyone. If a person does not know about a certain law, then he will not be held accountable for violating it.”

So according to Abu Hanifah and Muhammad, a Muslim in a non-Muslim country is allowed to make a contract that entails interest or any other contract that is null from the Islamic point of view.

The late Sheikh Muhammad Bakheet, the late Mufti of the Arab Republic of Egypt, gave a fatwa allowing that, and published it in his thesis about the laws of insurance (p. 7, An-Neel Press, Egypt, 1906) and the late Grand Sheikh of Al-Azhar Jad Al-Haqq quotes this opinion in his book Fatawa Muasirah, p. 86.

On the other hand, Abu Yusuf states that a Muslim living in a warring non-Muslim country is only allowed to do what is permissible under Islam and since riba is forbidden in Islam for the Muslim who should abide by the Islamic law and the non-Muslim being responsible for the subsidiary rules of Shariah: “And of their taking usury where they are forbidden it.” (An-Nisaa 4:161)

The three Imams maintain that the rules of the Islamic Shariah apply to all Muslims and non-Muslims living under the protection of a Muslim state. A Muslim is held accountable for any breach of the Shariah he commits in a foreign country, even if the laws of this country allow it, like usury and gambling.

Sheikh Jad Al-Haqq argues that the debate between the Hanafi scholars is about the ability to apply Islamic Shariah when a Muslim breaks the Islamic law in a non-Muslim country. He prefers the opinion of the majority of scholars that usury is strictly forbidden whether in Muslim or in non-Muslim state, except when a Muslim is borrowing money at an interest to meet essential needs, but when he is the lender, he is forbidden to charge an interest, because there is no necessity to do so.

According to this analysis, a Muslim’s acts should conform to Islamic law, as regards what is permissible and what is prohibited whether he is in an Islamic or non-Islamic state, since the positive laws, does not alter the rules of Allah.

Almighty Allah knows best.

Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.