Islam encourages the Muslim to be righteous. The Prophet (peace and blessings be upon him) declared, “The faith is righteousness.” This hadith explains the status of being righteous in Islam. Righteousness, as far as Islam is concerned, comprises both faith and practice. Righteous Muslims should have faith in Allah, His angels, Books, Prophets, etc. They, also, should translate their faith into practice by observing morality, truthfulness, honesty, fairness, etc.
Dr. Muzammil Siddiqi, president of the Fiqh Council of North America, states the following: In Psalms 31:1 God is called “righteous” and in Romans 1:17 the expression “righteousness of faith” is used. According to Islam, both of these expressions are correct and acceptable. We believe in the righteousness of Allah. The Qur’an says, (He is Righteous and Merciful) (At-Tur 52:28). The Prophet (peace be upon him) also said, “The faith is righteousness (al-birr).” Among Muslims the problem is not in these expressions; the real difference is in the understanding of “righteousness.” In Islam, the righteousness of Allah means that He would not punish anyone unjustly. The righteousness of believers means that they believe and live their lives according to their faith; while Christian theology generally emphasizes righteousness by faith alone without any action. It is often said, especially in the writings of St. Paul, that salvation is by faith alone, and many Christians take this to mean that ethics and morality, then are not necessary for salvation. This idea is not accepted in Islam.