How to manage your bank account without Riba
  • "Although the majority of scholars advises that we must withdraw our money out of usurious banks (something we will try to implement later insha'Allah), let’s start by cleaning up our bank accounts of all Riba.

    I) But above all, what is the Riba?

    This concept is delicate to explain and it requires a great job of analysis and a careful study of religious science in this area. Let’s try to simplify it for you.

    According to the Sheikh Uthaymeen’s definition * : the term ""Riba"" means adding something else -ziyâda- or delaying maturity of perception [of property] -ta'khîr-.

    Sheikh Salih Fawzan describes in his book ** 2 types of Riba:

    Riba related delay: Riba an-Nasi'ah which is divided in 2 types:

    The increase in the debt of the insolvent person. This is the origin of Riba practiced at the time of Jahiliyyah (pre-Islamic period of ignorance). When a person take out a loan with a third and when the payment period would end, the creditor gave the debtor the option to either pay his debt or postpone for an interest later on the amount borrowed.

    So if the debtor chooses not to pay its debt, then the creditor postpones the maturity for interest, which involved increasing the debt. That is why Allah has forbidden in His book this type of transaction, saying:

    ""And if someone is in hardship, then [let there be] postponement until [a time of] ease.”

    {Qur'an, Surah 2 verse 280). This clearly means that it is not possible to increase the debt to the creditor.

    The specific case today is home loans, consumer credits as well as bank overdrafts, which are short-term loans plus interest rate, but we will detail that later. This is also indirectly the case of bank books because we will see thereafter that the interest perceived is directly related to the credit that is either gave to individuals or companies. That is why it is forbidden to have bank books in which you earn interest.

    The exchange of two properties of the same type, by pushing the delivery date for all or only one of the properties in question. 6 categories are concerned. These are those which are prohibited in the setting of Riba related to the amount that we will see below.

    Riba related to the amount, called in Arabic ""Riba al-Fadl""

    This type of Riba refers to the sale of an object for another of the same type, but in different quantities. The Absolute Ruler has prohibited this kind of transactions for six types of goods: gold, silver, wheat, barley, dates and salt.

    So if one of the goods is exchanged for another of the same type, it is forbidden to do so in different amounts (by weight or measure).

    We could detail more because there are entire books that explain the field of Riba but once the bases established and the term understood, we can set up something solid on our scale, the one of an ordinary person."