Ruling on Bank Loans, Interest-Based Profits, and Zakāt
Reference: Ahkam wa Masail, Zakāt Issues, Vol. 1, Page 271
❖ Question:
I took a loan from a bank for the construction of a house. Some amount remained unused, which I deposited in another bank, and I am now receiving profit on it. A year has passed on this amount, but I have not paid zakāt on it because I consider it loan money, and I believe zakāt is not due on loan money.
Is zakāt obligatory on this amount? And is the profit I am receiving from the bank permissible?
❖ Answer:
Al-ḥamdu lillāh, waṣ-ṣalātu was-salāmu ʿalā Rasūlillāh, ammā baʿd!
◈ Zakāt on Loaned Money
Zakāt on loaned money is the responsibility of the lender, not the borrower. Therefore, the one who gives the loan must pay zakāt on it, not the one who takes the loan.
◈ Taking a Bank Loan and Depositing It for Profit
Your act of taking a loan from a bank and then depositing the unused portion in an interest-giving bank to earn profit is completely unlawful (ḥarām).
◈ Obligation to Leave This Practice
Such financial dealings are against the clear rulings of Sharīʿah. Hence, it is obligatory to free yourself from this practice as soon as possible.
Hādhā mā ʿindī, wallāhu aʿlam biṣ-ṣawāb.
