Question
What is the ruling of working in a conventional bank?
Answer
A job that does not involve usury or interest (riba) is essentially permitted. However, conventional banks are financial institutions that engage in riba, which is prohibited in Islam. Therefore, it is advisable to make every effort to seek other forms of employment that are permitted in one’s own capability. Employees may leave their job at conventional banks once they secure other permissible forms of employment. On the bright side, in Malaysia, Islamic banking has developed rapidly and become a global hub, offering an alternative to conventional banks in employment.
Explanation
Allah SWT said:
وَكُلُوا مِمَّا رَزَقَكُمُ اللَّهُ حَلَالًا طَيِّبًا ۚ وَاتَّقُوا اللَّهَ الَّذِي أَنتُم بِهِ مُؤْمِنُونَ
Meaning: "Eat the lawful and good things that God provides for you. Be mindful of God, in whom you believe."
Surah al-Ma’idah (88)
This verse emphasizes the obligation to seek and consume sustenance that is both halal and wholesome. The term "eat" mentioned encompasses actions such as drinking, wearing and riding[1]. This includes earning a livelihood, and it must be stressed that the source of sustenance must be halal.
This is because everything related to our sustenance and daily life will be accounted for before Allah SWT in the hereafter. As narrated by Ibn Mas'ud RA, the Prophet (PBUH) said:
لاَ تَزُولُ قَدَمَا ابْنِ آدَمَ يَوْمَ الْقِيَامَةِ مِنْ عِنْدِ رَبِّهِ حَتَّى يُسْأَلَ عَنْ خَمْسٍ عَنْ عُمْرِهِ فِيمَا أَفْنَاهُ وَعَنْ شَبَابِهِ فِيمَا أَبْلاَهُ وَمَالِهِ مِنْ أَيْنَ اكْتَسَبَهُ وَفِيمَ أَنْفَقَهُ وَمَاذَا عَمِلَ فِيمَا عَلِمَ
Meaning: “The feet of the son of Adam will not move from before his Lord on the Day of Judgment until he is questioned about five things: his life and how he spent it, his youth and how he exhausted it, his wealth, how he earned it and how he spent it, and what he did with what he knew."
(Narrated by al-Tirmidhi)
The concern arises when a person works in a conventional bank where most transactions involve riba, while Allah SWT says:
وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا
Meaning: "but Allah has allowed trade and forbidden usury."
Surah al-Baqarah (275)
Jabir RA also narrated that:
لَعَنَ رَسُولُ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ آكِلَ الرِّبَا وَمُؤْكِلَهُ وَكَاتِبَهُ وَشَاهِدَيْهِ وَقَالَ هُمْ سَوَاءٌ
Meaning: "The Prophet (PBUH) cursed the one who accepted usury, the one who paid it, the one who recorded it, and the two witnesses to it, saying they were all alike."
(Narrated by Muslim)
This evidence underscores the prohibition against engaging in business with those involved in usurious transactions, including working for conventional banks that engage in such practices.[2]
It is widely recognized that conventional banks were established in Malaysia before the advent of Islamic banks. While both operate in the same industry, they differ significantly in management, operations and principles.
A key distinction lies in how profits are generated: Islamic banking profits come from Shariah-compliant transactions, such as sales contracts, whereas conventional banking profits derive directly from interest on loan contracts, which is prohibited by Shariah as it involves usury (riba).
The fatwas outlined by countries like Jordan, Saudi Arabia, Kuwait, Palestine, Syria, Brunei and the Assembly of Muslim Jurists of America (AMJA) from among others, regarding this issue, can also be referred to.
As a conclusion, Muslims employed in conventional banks and involved in usurious transactions are encouraged to make effort to seek other permissible forms of employment.
Allah knows best.
References:
[1] Syamsuddin al-Qurtubi, al-Jami' li Ahkam al-Quran, ed. Ahmad al-Burduni & Ibrahim Atfisy, (Cairo: Dar al-Kutub al-Misriyyah, 2nd ed., 1384H/1964M), 6/263.
[2] Yahya ibn Syaraf al-Nawawi, al-Minhaj Syarh Sahih Muslim ibn al-Hajjaj, (Beirut: Dar Ihya' al-Turath al-'Arabi, 2nd ed., 1392H), 11/26.