Scholars unanimously agree that bank interest is riba (usury), and any attempt to draw superficial distinctions to justify what Allah has prohibited is futile.

Sheikh Muhammad Abu Zahra states: ⁽¹⁾ “The system of interest, which is riba, is not forbidden in Islam alone among the divinely revealed religions. It is also prohibited in the two preceding religions, Judaism and Christianity. Usury is forbidden in the Torah, the Bible, and the Quran—not in the Quran alone. There remains evidence of this prohibition in the Torah we have today, even if they have forgotten parts of what they were reminded of. In Deuteronomy, chapter 23, it is stated: 'You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest.'”

He further explains: ⁽²⁾ “The riba mentioned in the Quran is the same as the usury practiced by banks and dealt with by people. It is undoubtedly forbidden.”

Some might mistakenly believe that the term “interest” was unknown to Islamic scholars of old and only emerged with the advent of modern banks. This is a misconception refuted by historical evidence. Islamic scholars have long recognized the term “interest” and explicitly declared it forbidden. In the Fatawa of Sheikh al-Islam Ibn Taymiyyah, ⁽³⁾ it is mentioned: “A man in need of a loan could only find someone willing to lend him money in exchange for interest.”

Similarly, in the Fatawa of al-Subki: ⁽⁴⁾ “As for the transaction practiced nowadays, where a person goes to the Office of Orphans requesting, for instance, a loan of one thousand and agrees to an interest of two hundred or more or less, this is undoubtedly forbidden.”

These classical and contemporary juristic texts affirm that bank interest is the forbidden usury, a ruling not derived after the establishment of banks but rooted in Islamic tradition. In the introduction to his book Research on Usury, Sheikh Muhammad Abu Zahra asserts that interest is prohibited usury in Islam, Judaism, and Christianity. He further cites Christian theologians confirming the prohibition of bank interest, noting that the spread of usury in Europe stemmed from several reasons, among which economists misleading religious figures by portraying low-interest rates as administrative fees. This tactic is akin to modern efforts to deceive Muslim scholars and devout individuals. ⁽⁵⁾

Why Bank Interest Is Worse Than Pre-Islamic Usury

Riba (Usury) is the exchange of money for money with an increase. If the increase is immediate, it is called Riba al-Fadl. If the increase is deferred, it is referred to as Riba al-Jahiliyyah, the most severely prohibited form of usury. It is also called Riba al-Qur’an, as it is explicitly forbidden in the Qur’an. The entire Muslim Ummah has unanimously agreed on the prohibition of Riba al-Jahiliyyah. However, bank interest is far worse and more abhorrent than Riba al-Jahiliyyah for several reasons:

1. During pre-Islamic times, loans involved actual tangible money, such as gold dinars and silver dirhams. Modern banks, however, not only lend out existing deposits but also charge interest on money they create through credit or fictitious capital. This means banks charge interest on money they neither possess nor own—money that doesn’t exist in reality. Economists are well aware of the relationship between money creation, inflation, and price increases, and they understand the dangers this poses to the economy. ⁽⁶⁾
2. In Riba al-Jahiliyyah, both parties entered into agreements voluntarily. Al-Jassas states in Ahkam al-Qur’an: ⁽⁷⁾ “The usury known and practiced by the Arabs was the lending of dirhams and dinars for a period with an agreed-upon increase, based on mutual consent.”
   Thus, Riba al-Jahiliyyah was conducted with mutual agreement between the parties, whereas the interest in banking transactions is imposed unilaterally by the bank without the borrower’s consent.
3. If you borrowed a million of any currency during pre-Islamic times, the full amount would be given. In contrast, modern banks deduct 10% or 20% of the loan amount upfront. For example, the bank might give you 900,000 or 800,000 while labeling the loan as a million, and then charge interest of 20% or more, depending on the rate set by the central bank. Hence, the bank does not disburse the full million but collects it back with an added interest.
4. In pre-Islamic times, loans were primarily investment-oriented, often used for trade, agriculture, or livestock rearing. Today, most loans are consumption-based. Additionally, modern banks are predominantly commercial institutions that borrow to lend, with very limited involvement in actual investment activities.

Numerous resolutions and fatwas have been issued by Islamic Fiqh bodies, unanimously declaring the prohibition of bank interest. Among them are the following notable examples:

1. The Second Conference of the Islamic Research Academy at Al-Azhar
   Held in Cairo in Muharram 1385 AH (May 1965), it was attended by 85 prominent scholars representing 35 Islamic countries. Its first resolution stated: “Interest on all types of loans is prohibited usury.”
2. The First International Conference on Islamic Economics in Mecca
   Convened in 1396 AH (1976), it brought together more than 300 scholars specializing in Islamic jurisprudence and economics. They unanimously agreed—without exception—on the prohibition of bank interest, categorizing it as unequivocally prohibited usury.
3. The Second Islamic Banking Conference in Kuwait Held in 1403 AH (1983), it confirmed the prohibition of bank interest.
4. Resolution of the Islamic Fiqh Council of the OIC at its second session in Jeddah, Rabi' al-Thani 1406 AH (December 1985), the council declared that any increase or interest charged on a debt after its due date because the borrower could not repay it, or interest agreed upon at the outset of a loan, constitutes prohibited usury.
5. Resolution of the Fiqh Council of the Muslim World League at its ninth session held in Mecca in Rajab 1406 AH (March 1986), the council ruled that all income derived from usurious interest is unlawful.
6. The Third Islamic Banking Conference in Dubai held in 1406 AH (1986), this conference reaffirmed the prohibition of bank interest.

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(1) Research on Usury, Sheikh Muhammad Abu Zahra, Dar al-Fikr al-Arabi, Cairo, 1420 AH/1999 CE, p. 5.
(2) Ibid., p. 22.
(3) Majmu‘ al-Fatawa, Ibn Taymiyyah (29/430), King Fahd Printing Complex, Medina, 1416 AH/1995 CE.
(4) Fatawa al-Subki (1/327), Dar al-Ma‘rifah, Beirut.
(5) Research on Usury, p. 10.
(6) Evaluating the Banking Experience, pp. 72–73.
(7) Ahkam al-Quran by al-Jassas (2/184), Dar Ihya al-Turath al-Arabi, Beirut, 1405 AH/1985 CE.

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