What to do with Riba Money – Bank Interest Money ..?
The notion that Interest money can be used only for toilets is not correct, it can be used for wider purposes
The Islamic Fiqh Council in Makkah (19-20 Rajab1406 A.H./1985 C.E.):
All income collected through Riba interest is forbidden property,and the Muslim may not use it for any personal benefit. Such money must be spent on infrastructure projects such as schools, hospitals, etc. to benefit Muslims.
Such spending is not considered charity (sadaqah), but it is a form of purification from the haram component. It is not permitted for the Muslim to leave the interest monies with the bank,since that would benefit the banks,especially if they are non-Muslim and foreign banks that may use such funds against Islam and Muslims directly or indirectly. This is being said with the full understanding that continuing dealings with Riba-based banks,with or without interest,is not permitted.
This same opinion was given earlier by the Fatwa Committee of Al-‘Azhar in the 1960s with regards to deposits with foreign banks which were necessary to facilitate international trade.
—–///— A Basic Guide to Contemporary Islamic Banking and Finance – Mahmoud Amin El-Gamal
Shaykh ‘Abd al-‘Azeez ibn Baaz (may Allaah have mercy on him) said:
With regard to the interest that the bank has given to you, do not give it back to the bank and do not consume it yourself; rather spend it on charitable causes, such as giving it to the poor, repairing public washrooms, and helping debtors who are unable to pay off their debts. Fataawa Islamiyyah (2/407)
Shaykh Yusuf al-Qardawi – Quote from the translation of the book ‘Riba and Bank Interest’ by Yusuf al-Qardawi, Institute of Policy Studies, Islamabad, Pakistan
‘To forego interest from the deposits in banks practicing usury, even out of Taqwa, is still not right; doing so is much more sinful than taking it because with it non-Muslims establish and run organisations for furtherance of their un-Islamic objectives.’
Shaykh Suhaib Hasan (UK) – The Islamic Shari’a Council, London, UK, May 2002 – ‘Interest money, according to the most careful opinion, is good for any charitable purpose (including educational fees for poor students). Apart from building the mosques or printing the Qur’an’.