Question:

I live in Britain and I have put my money in a bank in Egypt (National Bank of Egypt) because I am planning to live there soon. This bank gives me an increase of money depending on how much they make every year. They don't give me a solid percentage. For e.g. this year I could get 10% and next year I could get 4% (this depends on how successful the business was, in which they used my money in). I asked the man who worked there whether this is Halaal or not he said it is Halaal because it is not a fixed rate. Also, I heard from a Shaykh that this is Halaal, but I still feel a little suspicious as Ribaa is a big sin in Islam. I want to be sure. Please give me a clear answer to my question.

Fatwa:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger, may Allah exalt his mention as well as that of his family and all his companions.

First of all, you should know that it is forbidden to deal with any bank whose transactions are based on interest and usury. It is not permissible in principle to open a bank account with such banks be it a saving account, or a current account or else, as by doing so one is helping them to subsist. Allah Says (what means): {Help you one another in virtue, righteousness and piety but do not help one another in sin and transgression. And fear Allah. Verily, Allah is Severe in punishment.}[Quran 5:2].

So it is forbidden to deal with a bank which deals with usury and interest except for a necessity, for example when there is no Islamic bank and one fears to lose his money, or that the customer has wages that he only could get through the bank. So in such cases it is permissible to open an account in the bank provided it is a current account without any interest.

If the bank does not allow other accounts except saving accounts, then it is permissible due to the necessity. In this case the customer takes the interest but he should not spend it on himself or on whomever he is obliged to spend for, rather he should spend it in the public interest [of the Muslims] or on the poor and needy people with the intention of getting rid of this money, and not with the intention of gifting it, as Allah is Tayyib (which implies purity) and He accepts only that which is pure.

What we know about the bank that you inquired is that it deals with interest and usury, so it is not permissible to take the interest whether its percentage is defined or undefined, as this is forbidden because the reality of the transaction between the bank and the customer is money lending and the contract is that of a loan contract. The client is the creditor and the bank is the debtor because the capital money is guaranteed by the bank, and the interest that the client takes is extra money on his capital money.

Taking extra money when giving a loan is a forbidden interest and this is included in the saying of Allah (which means): {Allah has permitted trading and forbidden usury.} [Quran 2:275]. In addition to this the Prophet said "Allah has cursed the one who consumes Riba (i.e. usury or interest), the one who gives it to others, the one who writes it down and the one who witnesses it. He said: "All of them are equal in sin." [Muslim]

To conclude, we say that if this bank has an Islamic branch whose dealings are according to religious requirements and run by an Islamic committee, then it is permissible to take this profit and benefit from it from this Islamic branch as in such a case it is a result of a religious co-partnership or other religious transactions.

Allah Knows best.