Question : A question was asked about [the validity of] dealing with non-Islamic banks.

Fatwa in Brief: This is not permitted. All bank work is illegal because it is based on the practice of riba.

Fatwa of the Permanent Committee, no. 21406

Response:

If banks declare that they work according to [the principles and demands] of Islamic law, and they set up a committee consisting of established legal scholars to [monitor and] approve their work, it is permitted to deal with [and invest one’s money in] them.

Commentary:

If banks declare that they work according to [the principles and demands of] Islamic law in all dealings, and they set up an internal committee of established scholars to [monitor and] approve their work, then it is legal to deal with these banks. The responsibility for [the validity of] these dealings will be carried by the censorship committee.

And God knows best.

Dr. Anas Abu Shadi