Rules Concerning Ribā: Ruling on Ribā and Bank Interest on Deposits

Practical Laws of Islam as per the teachings of Imam Khamenei

Rules Concerning Ribā: Ruling on Ribā and Bank Interest on Deposits

English:

Question #1607:

What is ribā? And is the amount calculated as a percentage taken by the people who have deposits with the banks regarded as ribā?

Answer #1607:

As an expression, a ribā-bearing loan involves paying an extra amount by the borrower to the lender. The profits arising from the investment of the money deposited with a bank for safe keeping, which is used by the bank on behalf of the saver by virtue of an Islamic contract, is not considered ribā and, thus, is not problematic.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Rules Concerning Ribā