Receiving Salary via an Interest-Based Bank

The usurious transactions of banks have unfortunately dominated economic systems all over the world. Now, it seems that even Muslim governments and institutions not only pay no attention to the enormity of their usurious dealings with these banks, but also attempt to help them flourish and grow by forcing their employees to receive their salaries through them.

Sheikh Muhammad Saleh Al-Munajjid, a prominent Saudi lecturer and author, stated,

Interest-based banks are institutions that are based on evil and corruption, because they are based on a system that commits one of the major sins — riba (usury). Hence, these institutions disobey Allah and contravene His religion. The warning against riba includes all those who establish these institutions, and participate enter into partnership with them, deposit their money in them, permit establishing them, and so on. So, Muslims should refrain from having any relation with these institutions, unless they are forced to do so and cannot find any other alternative.

Nowadays, among the cases of necessity (i.e., compulsion) is what some countries and public and private institutions do: They transfer the salaries of their employees to riba-based banks. This act is haram (prohibited by Allah), because it strengthens the financial capacity of those banks. However, the employees who receive their salaries via those riba-based banks are not committing a sin, provided that-

1. They are unable to find a way other than dealing with these riba-based banks. So, if they can receive their salaries directly from the employers or via an Islamic bank, then they have no excuse.

2.They withdraw all the salary,

3. They avoid leaving any sum of his salary with that riba-based bank, because otherwise they will be supporting these banks.

The solution for the one who has no choice but to deal with those banks is to open a current account and have the salary transferred to it. It is well known that current accounts are less serious than savings accounts, because the former are readily accessible and the banks cannot make use of the money deposited in them.

In this regard, the scholars of the Standing Committee for Scholarly Research and Ifta’ stated,

There is nothing wrong with receiving your salary via the bank, because you take it in return for your working for someone other than the bank. But that is subject to the condition that you do not leave the salary in the bank after it has been transferred to your account, lest it be used in riba-based transactions.