Debt and Loan: Prohibition of Depositing Money for Interest-Based Returns

Practical Laws of Islam as per the teachings of Imam Khamenei

Debt and Loan: Prohibition of Depositing Money for Interest-Based Returns

English:

Question #1759:

Is it permissible for any person to deposit funds with others and charge monthly interest?

Answer #1759:

If the deposited money was with the intention of investment in accordance with a shar‘ī contract, there is no harm in that, nor is there any objection to receiving the profit as a result of the investment. However, should it be intended as a loan, the loan deed is correct in principle. Yet, the stipulation of earning ribā is invalid. Accordingly, any interest thus earned amounts to ribā which is ḥarām.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Debt and Loan