On this issue, Dr. Rajab Abu Maleeh stated:
According to resolutions made by juristic assemblies and the majority of contemporary jurists, traditional banks that give or take interest, through lending or borrowing funds, are in fact dealing with usury (riba) that is prohibited in Islam. This is also based on the legal contract that governs the relationship between the bank and the depositor or the borrower, which is founded on giving or taking loans (the bank owes money to the depositor and the borrower owes money to the bank) and, thus, falls under the rulings of loans in Islamic jurisprudence (fiqh).
The Prophet (peace and blessings be upon him) cursed the one who accepts usury, the one who pays it, the one who writes [the contract], and the two persons who witness it. He (peace and blessings be upon him) said about them all, “They are all equal.” (Muslim) This means that they all share the same sin. When Islamic law (sharia) prohibits any matter, it blocks all the ways that lead to it.
The person who works for such banks may perform one of the following two jobs:
1) Doing work that has nothing to do with writing contracts dealing with usury or witnessing them, for an institution that may practice some lawful transactions, such as bank transfers and banking services, while at the same time practice unlawful transactions such as giving or taking interest: In this case, it is permissible for those who cannot find other lawful jobs to work in places where what is lawful and what is unlawful are mixed, provided that they are not directly involved with prohibited actions.
2) Doing work that involves writing and dealing with contracts dealing with usury: The person who does this is cursed according to the hadith, in which the Prophet (peace and blessings be upon him) cursed the one who accepts usury, the one who pays it, the one who writes the contract and both the witnesses. It is impermissible to do this job except in the case of extreme necessity; as necessity overrides prohibition. Moreover, necessity is assessed according to its extent and the ruling is annulled when the state of necessity changes.
The Assembly of Muslim Jurists of America (AMJA) discussed this issue in its fifth session and decided on the impermissibility of working in departments concerned with usury-based loans. However, it is permissible for those who cannot find any other lawful jobs to work for usury-based banks, provided that they are not directly involved with usury-based transactions. Hereinafter is the resolution of the AMJA:
The rule on working for usury-based banks is that it is unlawful, due to the curse of the Prophet (peace and blessings be upon him) on the one who accepts usury, the one who pays it, the one who writes the contract and both the witnesses. He (peace and blessings be upon him) said about them all, “They are all equal.” However, demanding circumstances or necessity must be taken into consideration, as long as necessity is assessed according to its extent and that steps are taken to put an end to the situation.
Juristic assemblies have made allowances for those who cannot find lawful jobs in places where the lawful and the unlawful are mixed, provided that they are not directly involved with the prohibited actions and that they make a concerted effort to search for another job that is free of doubtful aspects.
Accordingly, AMJA does not see anything to prevent this ruling from being applied to work for usury-based banks; hence, allowance is made for work in fields that do not deal directly with usury, whether in writing, witnessing or direct, intentional assistance in any of those areas.
Now, we have to draw the attention of those who want to work in these places, or those who are already working there to some points and regulations:
First: Livelihood and lifetime are determined and guaranteed by Almighty Allah; as He the Almighty says, “And in the heaven is your provision, and that which you are promised.” (Adh-Dhariyat 51: 22)
The Prophet (peace and blessings be upon him) said, “The Angel Jibreel revealed to me that that no soul shall die until it finishes its set provisions and term limit. Therefore, be pious, and strive for gains lawfully. Let not delayed gains push you to acquire such by disobeying Allah, for what Allah holds shall not be obtained save by obeying Him.” (Al-Hilyah)
Also, `Abdullah bin Mas`ud (may Allah be pleased with him) said, “Allah’s Prophet (peace and blessings be upon him) said, ‘(The matter of the creation of) a human being is put together in the womb of the mother in forty days, and then he becomes a clot of thick blood for a similar period, and then a piece of flesh for a similar period. Then Allah sends an angel who is ordered to write four things. He is ordered to write down his (i.e. the new creature’s) deeds, his livelihood, his (date of) death, and whether he will be blessed or wretched (in religion). Then the soul is breathed into him. So, a man among you may do (good deeds till there is only a cubit between him and Paradise and then what has been written for him decides his behavior and he starts doing (evil) deeds characteristic of the people of the (Hell) Fire. And similarly a man among you may do (evil) deeds till there is only a cubit between him and the (Hell) Fire, and then what has been written for him decides his behavior, and he starts doing deeds characteristic of the people of Paradise.’” (Muslim)
In another narration according to Muslim, “When the drop of (semen) remains in the womb for forty or forty-five nights, the angel comes and says: My Lord, will he be wretched or fortunate? And both these things would be written. Then the angel says: My Lord, would he be male or female? And both these things are written. And his deeds and actions, his death, his livelihood; these are also recorded. Then his document of destiny is rolled and there is no addition to or subtraction from it.?” (Muslim)
Second: Whoever leaves something for the Sake of Almighty Allah, He recompenses him with something even better than what he left. Let not great amounts of money deceive you; as something that is small but permanent is better than something that is much but does not remain. Always remember that every body which is nourished with that which is unlawful will be first in Hellfire.
Third: Fatwas from the juristic assemblies are more deserving to be adopted and followed than those of individuals, regardless of their status or knowledge, especially concerning modern issues that are both complicated and controversial.
Fourth: There are different fields of specialization regarding fatwas; hence, no jurist can issue fatwas on all matters. The questioner should consider the jurist’s field of specialization, especially when asking about modern financial transactions.
Fifth: We have to seek judgment from our hearts even if we are given fatwas; as piety is the soundness of the heart, and sin is that which creates doubt and you do not like people to know about it.
Also, you should remember that whoever guards against doubtful matters keeps his religion and his honor blameless. However, whoever falls into doubtful matters falls into that which is unlawful, just as a shepherd who grazes his cattle in the vicinity of a pasture that has been declared prohibited (by the king) is likely to stray into the pasture.