Is Banking in the West allowed in Islam? Is dealing with interests allowed in Islam?
The sections of this article are:
1- Is banking in the West allowed in Islam?
2- Banks didn't exist 1400 years ago!
3- I am not for dealing with interest either.
4- Conclusion.
It is important to know why most of today's Muslim Ministers don't allow accepting interests in the banks. During Prophet Muhammad's time, 1400 years ago, and before Islam, people used to take advantage of each others. The strong used to literally eat the weak.
It used to be when the rich lends money to the poor, the rich would put so much interest on the money (like the Capitalist system does today with their excessive interests by forcing you to pay 3 times the value of your house by the time you finish paying off your loan), that the poor would spend a long time paying it off, and in many times he would end up giving up his mule, or even his children as slaves depending on how big the loan was.
When Prophet Muhammad peace be upon him came, he prohibited addition of interests to any loan so people won't be able to take advantage of each others. This is all beautiful and still valid today and will always be valid if we're dealing with each others on one to one or personal level.
For instance, if I lend you 1,000 dollars, then according to Islam, it is totally sinful for me to take advantage of you and have you sign an agreement saying that you will return 1,500 to me with in let's say 1 year. Taking interest from personal loans is what Prophet Muhammad peace be upon him prohibited.
Banks didn't exist 1400 years ago!
Banks did not exist among the Muslims 1400 years ago. Today's banks have expenses that they must pay off, from employee salaries, to rent, utilities, insurance, etc...
The banks today can't simply afford to lend you 100,000 to buy a home for instance, and then get back 30 years later 100,000. The bank will bankrupt in no time.
Banking in the West is allowed. Don't listen to those ridiculous ministers who say banking in the West and dealing with interest (riba in Arabic) is sinful, because they are completely ridiculous and totally irrational. We don't have choices here in the West. When these Muslim scholars build Islamic banks for us in the West that don't charge us more than what the Western banks charge, as ironically the Muslim banks do charge more under other banking fees that are not an interest but loan-points, then we'll go for them.
But until then, let those hypocrites just shut up and keep kissing up to their dictatorship governments. It's ironic that I don't hear them on TV say anything about the corrupt governments that they're living in the Muslim world. But I do hear them ALL THE TIME prohibiting dealing with banks in the West. That's hypocrisy!
How in the world are we Muslims supposed to be able to survive in the West if we don't deal with their banks?!
I am not for dealing with interest either:
Unfortunately today, people pay too much interest for taking mortgage loans. They literally end up paying 3 times the house value by the time they finish paying off the loan. If I had a choice, I wouldn't deal with any bank.
But you can't ask every Muslim family to live in an apartment to avoid buying a house. Some families are too large to be accepted to live in any apartment building. Other families might want that special comfort and privacy in the house that the apartment doesn't have. For what ever the reason is, if a Muslim family decides to buy a house, then they must deal with the interest the banks charge.
The only way a family can avoid the banks and still buy a house is to save up the money for the house, which is virtually impossible for most people, because not anyone can save 100,000 to 200,000 or more to buy a house in a descent neighborhood all in cash.
Does anyone have a solution?
Conclusion:
As some scholars agree, banking in the West for those Muslims who live in the West is allowed in Islam. Muslims in the West have no choice but to live according to the laws of the countries they reside in. If a Muslim can avoid dealing with bank interests, then he should certainly do it, and may Allah Almighty bless him, even though I am certain there is almost no way he can.
Therefore, since most Muslims have no choice but to deal with banks' interests one way or another, then for them it is not sinful to do so as long as they try their best to avoid it.
And Allah Almighty certainly knows best.
Allah, Islam, Quran, Muhammad questions and answers.