Interest money (which the bank calls “profit”) keeps being deposited in my bank savings (PLS) account. What should be done with this money? Is it permissible to bring it into my own use, or should it be left in the account, or withdrawn and given to some channel of expenditure? And what is the ruling on the interest that I have already used in the past out of unawareness?

The fixed “profit” received on a bank account is, in Shariah terminology, interest (riba) itself, and the prohibition of interest is categorically established from the Qur'an: ﴿وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا﴾ (Allah has permitted trade and forbidden interest) (Surah al-Baqarah: 275). The fatwa of the Permanent Committee for Scholarly Research and Ifta (al-Lajnah al-Da'imah lil-Buhuth al-'Ilmiyyah wa'l-Ifta) is: “The profit that the bank gives to account holders on their deposited amounts is interest, and it is not permissible for him to benefit from it. It is incumbent upon him that he repent to Allah for keeping money in interest-based banks, withdraw his money and its interest, keep the principal capital with himself, and spend the interest on works of good: in helping the poor and the needy, and in providing public facilities, etc.” (Fatawa al-Lajnah al-Da'imah, quoted in Fatawa Islamiyyah: 2/404). Therefore, neither is it permissible to use this money oneself, nor is it correct to leave it lying in the bank, because by leaving it, that money will be put to work in the bank's own interest-based business; the ruling is precisely that it be withdrawn and given to a channel of good expenditure (masraf-e khair).

It should be clear that giving this money to an entitled person does not happen with the intention of the reward of sadaqah and charity, because the saying of the Messenger of Allah ﷺ is: “Indeed Allah is Pure (Tayyib) and accepts only the pure (tayyib wealth)” (Sahih Muslim: 1015). Interest wealth is not pure for the giver, so neither should the intention of reward be made upon it, nor should it be counted in one's own zakat, nor should this expectation be held that it will be accepted with Allah as his sadaqah. This is, in reality, absolution and disposal (takhallus) of forbidden wealth. However, for the poor and needy person who receives this money, its use is lawful (halal), because in his right this wealth is not a forbidden earning.

This money should be spent on the poor and the needy, on the care of orphans and widows, and on works of public welfare (for example, facilities of roads, water, treatment, etc.). It is not permissible to put it to the personal use of oneself or one's family, to the payment of one's own debt, or to one's own obligatory expenses, because this is equivalent to benefiting from that very thing from which one has been forbidden.

Regarding the person who, on the basis of unawareness of the ruling, has used this money in the past, the saying of Allah Most High is: ﴿فَمَن جَاءَهُ مَوْعِظَةٌ مِّن رَّبِّهِ فَانتَهَىٰ فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللَّهِ﴾ (Surah al-Baqarah: 275), that is, whoever received the admonition from his Lord and then desisted, what has already passed is his, and his matter is entrusted to Allah. The fatwa of Shaykh Abdullah ibn Jibreen, may Allah have mercy on him, is that it is incumbent upon such a person that he repent from that interest which the bank gave him and he ate, but it is not incumbent upon him to take out and give back the amount eaten in the past, because Allah has forgiven it; however, if he receives interest in the future, he should give it to those people who are deserving of sadaqah, whether they are relatives or others (Fatawa Islamiyyah: 2/406–407). And zakat on the principal capital will remain separately obligatory according to the rules; the interest money is neither zakat nor will it be counted in zakat.

A Maqasid Note: The protection of wealth (hifz al-mal) demands not only the growth of wealth but also its purity, because the lawfulness of wealth is connected with the acceptance of worship and supplication (dua). Disposal (takhallus) of interest is the protection of one's wealth, one's religion and one's hereafter — all three.

Translated from the original Urdu fatwa.