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Fatwa CenterRuling on taking pension from an interest bank
Question
My father in law was an officer of a interest based bank in Bangladesh. He retired 5 years earlier. He has been taking pension from this bank after retirement. Is it allowed to take pension from such a bank?
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ʻalayhi wa sallam, is His slave and Messenger.
It is prohibited to work in an interest bank because it involves complicity in interest transactions. It has been authentically reported that the Prophet, sallallaahu ʻalayhi wa sallam, cursed those who consume usury, those who pay it, those who witness it, and those who record it, and said, “They are all equal.” [Muslim]
The earnings, including salary, pension, or any other compensation gained by working in such an interest bank are considered ill-gotten wealth and the earner must dispose of them by giving them in charity to the poor and needy. It is impermissible for him to use such ill-gotten earnings unless he is poor and in need of them, in which case, he is allowed to use the ill-gotten wealth in proportion to his need only.
An-Nawawi 
said, “If one pays the ill-gotten money to the poor, then this money is not deemed forbidden for the poor; rather, it is lawful (for them). He may also offer it in charity to himself and his children if he is poor, because if his children are poor, they are eligible to receive charity. In fact, they should be the primary benefactors of charity with greater reason, and he himself may avail himself of that money in proportion to his need because he is also poor.” [Al-Majmoo‘]
Allaah Knows best.
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