By Aaron Spevack
This fatwā listed on Dār al-Iftā’’s website – the official fatwa institution of Egypt and connected with scholars of al-Azhar – deals with the question of whether working in banks is permissible on account of their dealing in what appear to be interest-based transactions.
In the Arabic text used for this analysis, the mustaftī (fatwā petitioner) asks on behalf of his father, described as a God-fearing man deeply concerned with financial ethics, whether or not his father’s job in “one of the banks of Egypt” is ḥalāl or ḥarām.
The brief response on the website states that there is no harm in his father’s working in a bank due to the scholarly disagreement over the nature of employment in a bank though, the fatwā emphasizes, there is full agreement that ribā is ḥarām. In this abridged answer the only justification offered is that when there is disagreement, one who engages in the act in question is considered to be following the opinion of the scholar who considered it permissible and there is therefore no sin upon that person.
This is interesting as the emphasis here is not on defining ribā (Is it usury? Is it merely interest without excessive compounding?) nor the nature of the relationship between bank employee and bank, but rather it merely emphasizes the principle that when there is disagreement a person’s acts may be judged according to the opinion that permits it. This is worthy of note, as it does not say anything about the path of strictness (‘azīma) or dispensation/leniency (rukhṣa). That is, it does not recommend taking the most conservative and cautionary path and furthermore it does not discuss the intention of the individual. Instead, it merely states that since there are scholars that permit the action then the person is not sinful nor asked to do anything more (i.e. follow a stricter path, make a plan to change careers when possible, etc).
At the bottom of the fatwā is a link for a more detailed explanation. In the more detailed fatwa, the nature of ikhtilāf (disagreement) over banks is stated to be due to differing conceptions (taswīr) of the relationship between banks and clients. This difference in conception leads to difference in legal formulation (takyīf). Two differing conceptions are mentioned that correspond with differences between scholars of qānūn (conventional or statutory law) and iqtisād (economics), both modern developments that grew from the Muslim world’s engagement with post-Enlightenment modernity. It is worth noting here that nuanced theoretical variables are impacting the conception of the bank-client relationship and these theories are external to traditional Islamic law. Could such extra-revelatory material’s inclusion be justifiable under the concept of ‘urf (custom)? That is, does custom legitimately impact the conception of an action before its legal ruling is formulated, and if so, can such speculative and probabilistic theories’ be classified under ‘urf?
In any case, the two differing conceptions of the bank-client relationship are:
From this perspective and in conformity with the perspective of conventional law (qānūn), the lending relationship was considered usurious (ribāwī). However, scholars who took this view were divided; was engagement in the banking system justifiable due to dire necessity (dharūra). Those who considered it a dire necessity argued–based on a legal maxim – that ‘necessities render the forbidden permissible’. Those who considered engaging in the banking industry to be other than necessity defined durura as a state wherein one might perish or come close to perishing. Since it was not a necessity, some ruled that it was forbidden while others considered it permissible due it being a need (hājah) rather than necessity (dharūra). Yet again, appealing to a legal maxim, they argued that at times the ruling of needs takes the ruling of necessities.
Those who viewed it from the perspective of economists and saw banking rather as an investment relationship – after all banks take depositors money and reinvest it in order to realize profit – considered this investment relationship to be an invalid muḍāraba rectified with an ijārah. That is, they saw it as a type profit-sharing venture wherein one party puts up the cash and the other engages in the work (including investing), and with the inclusion of a leasing contract somewhere (unspecified) in the mix such a profit-sharing venture could be rendered permissible. The fatwā doesn’t elaborate, but presumably the solution is found in how the bank invests the depositor’s money wherein a lease contract generates additional income on a property and that lease income replaces conventional interest payments.
From this perspective the bank-client relationship was viewed as a new transaction and contract without precedent, and therefore required new ijtihād. The fatwa mentions jurists of Samarqand permitting bay’ al-wafā’ – which goes undefined – which was a new kind of contract deemed permissible by (some) jurists of the time. Here is a pre-modern precedent that would seem to emphasize that such situations are not entirely modern; some pre-modern societies introduced new transactions that required new ijtihād.
Furthermore, in addition to being a new transaction and contract, such scholars also considered the interests (maslaha) of the people and their dire need (darura) for such new contracts. While this justification looks at individual considerations, it also takes into account the demands of the contemporary time with its new and unprecedented developments, such as the need for modern transportation and communication systems. As well as other social issues such as population growth. Most striking to my mind is the inclusion of “accounting sciences and book-keeping” (‘ulūm al-ḥisāb wa imsāq al-dafātir) as well as the concept of “corporations” as entities in contracts. That these developments could be considered catalysts for what appear to be fundamental changes in the approach to transactions is striking and represent, again to my mind, the increasing complexity of the conception (taswīr) of an action with the inclusion of probabilistic (ẓanni) and highly complex interpretive and predictive theories (e.g. accounting). Banking in a vacuum or small pre-industrial society would seem to be very different in conception from banking in a large industrial society which necessarily engages with the world economy.
In closing, the longer fatwā returns to the main point of the abridged fatwā, namely that
- one can only object to a person’s actions if there is consensus on its prohibition
- if there is disagreement over an issue, it is recommended (but not obligatory) to avoid that issue
- if one finds oneself somehow compelled to partake in something whose permissibility is debated, they must follow the opinion of the scholar who permits it.
These three points are also drawn from legal maxims.
The fatwā then emphasizes, in case there is doubt and perhaps speaking to some of the more permissive reformist interpretations, that there is no disagreement over the prohibition of ribā. It cites Qur’ān and ḥādīth in doing so but at no point addresses whether or not ribā is usurious gain or interest, the former being considered in western circles to be excessive and unjust increases over the principle and the latter to be reasonable increases. It also does not engage with the opinions that ribā only applies to gold and silver currency and therefore not to paper money or virtual currency.
Despite all of this useful information and analyses that the fatwa provides and the questions it raises, ultimately the answer to the question of working in a bank is: since there is scholarly disagreement (ikhtilāf) in conception and legal formulation one who works in a bank follows the opinion that permits it and cannot be censured for doing so. For the common person, the existence of ikhtilāf provides choices that can be taken without too much concern, according to the tone of the fatwa.
 This fatwā can also be found translated in answer to a different petitioners question.
 I have intentionally left “ribā” untranslated as this ambiguity is important to the tone of the
 It is a buyback scheme wherein A needs cash and owns an asset and B has surplus cash and agrees to buy the asset on condition that A will buy it back at some future date. It is viewed by some as a circumvention of the prohibition of interest in that B derives some benefit (usufruct) from what is essentially a loan to A. Others permitted on account of it being a new type of transaction which generally conforms in form to a sale even if in spirit it may be seen as problematic.
 The fatwā uses the term ibtla’ which is literally translated as “afflicted.” The term seems to removes the agency from the person following the opinion and places it instead on some external factor. I have therefore translated it as “compelled” despite there being other legal terms for this, such as karaha.