Banking: Ruling on Transactions and Profits in Iranian Islamic Banks

Practical Laws of Islam as per the teachings of Imam Khamenei

Banking: Ruling on Transactions and Profits in Iranian Islamic Banks

English:

Question #1906:

Can the transactions of banks in the Islamic Republic of Iran be deemed sound? What is the ruling in the matter of buying property and other things with money received from banks? What is the view on performing ghusl and prayer in the property? And is it permissible to receive the profits arising from depositing money with these banks?

Answer #1906:

Generally speaking, the transactions carried out by the banks in accordance with the laws passed by the Islamic Consultative Assembly, and sanctioned by the esteemed Council for Safeguarding the Constitution should be all right. Accordingly, they are deemed valid.

The owners of the capital can have any profit arising from investing the capital in accordance with any proper Islamic contract.

Taking a loan from the banks to buy a property or other things should be without a problem provided that it is done in accordance with one of the aforesaid contracts. However, if it took the form of a ribā-bearing loan, it is ḥarām as a matter of a religious duty. Yet, the loan contract is concluded; the borrowed money can be had by the borrower, who should, as a result, have the right to use it and to possess whatever is bought with this money.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Banking