Dealing in Interest in America or UK

Q: I have recently been told that it is permitted for a Muslim to deal in interest in America or UK i.e. a Muslim can open interest bearing savings bank account in America or UK. The interest received from the bank should then be given to poor and needy Muslims in Pakistan or India. I am told that this ruling is based on the facts that non-Muslims should not benefit from the "interest" not taken by us. I am also given to understand that perhaps you have approved this ruling.

I must say that in America or UK I maintain Current accounts only and thus the question of interest does not arise. The same thing I have tried to do, wherever possible. My idea is based on the fact that a Muslim should have no dealings in the interest, be it as a receiver, writer, or giver.

Please comment on this aspect of "interest" and if your ruling is different for different regions, please advise your ruling for the major regions of the world, such as America, UK, Asia, Saudi Arabia.

(Muhammad Saleem Desai, AI Khobar, Saudi Arabia)

A: The correct position is that dealing in interest is haram, both in a Muslim or a non-Muslim country. Some jurists have opined that interest bearing loans can be given to a non-Muslim citizen of a non-muslim country, and the interest charged from him is halal for a muslim. But this view has not been endorsed by the majority of the jurists. So, the correct view is that charging interest is not permitted in any case, no matter whether the debtor is a citizen of a Muslim country or not.

As for opening a saving account in a non-muslim country with intention to distribute its interest among the poor, I have never recommended or approved of it. I always advise the Muslims to keep their money in the current account. However, if somebody has opened a savings account, either due to his ignorance about the Shariah injunctions or because of his negligence, then, in that case only, he should give the amount of interest to the poor persons in order to dispose of this unclean money, and not to earn the thawab of sadaqah. But it does not mean that he should deliberately open an interest bearing account for the disbursement of its interest among the poor.

In fact, opening an interest bearing account amounts to entering into a transaction of interest which in itself is a clear sin. The one who has already committed this sin is advised to atone for it by giving the interest money to the poor, but one cannot be advised to commit a sin in order to atone for it by helping the poor. Taking bribe, for example, is a sin. If a person has earned some amount through bribes and he is unable to return it back to the original owners, he is advised to give that amount to the poor in order to atone for his sin to the best possible extent. But one cannot be advised to accept bribe with the intent of giving the money to the needy persons. The same principle is fully applicable to the interest transactions also.