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Can Muslims Use Western Banks?

22 August, 2022
Q As-Salamu alaykum. Is it permissible to deposit my money in Western banks?


Wa `alaykum As-Salamu waRahmatullahi wa Barakatuh.

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:

If there are no Islamic banks or there are Islamic bank but they do offer good services, it is permissible to deposit your money in Western banks provided that you do not take or give interest.

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In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:

Depositing money in conventional banks

If there are Islamic banks that fulfill all the needs of Muslims in the community, many scholars would rightly argue that it is not permissible to deposit money in a conventional bank whether in saving or current account regardless of the issue of earning interest.

But whenever there are needs that cannot be fulfilled by Islamic banks, either because they do not exist or because their services are bad or insufficient, it is permissible to deposit in Western banks.

But a Muslim does not take or give interest which is exactly the riba that is not permissible in the Quran.

What to do with earned interest from a bank account

One last point is worth mentioning. If you have to deposit large sums and to extended period, the Second Islamic Banking Conference held in Kuwait in 1982 determined that in such cases it is better to take the due interest and give it to charity than depositing in current account that does not generate interest or leaving it to the bank itself.

This is based not on double standard but rather on weighing evils. That is when one faces two evils and has to choose one of them, the lesser evil is taking the interest and giving it to charity, not that we, without any need, deposit in a conventional bank and take the interest to charity.

Allah Almighty knows best.

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

About Prof. Dr. Monzer Kahf
Dr. Monzer Kahf is a professor and consultant/trainer on Islamic banking, finance, Zakah, Awqaf, Islamic Inheritance, Islamic estate planning, Islamic family law, and other aspects of Islamic economics, finance, Islamic transactions (Mu'amalat). Dr. Monzer Kahf is currently Professor of Islamic Finance & Economics at the Faculty of Economics and Management, Istanbul Sabahattin Zaim University, Turkey