Bank loans

Fatwa no. 21788 All praise be to Allah Alone, and peace and blessings be upon the final Prophet. To proceed: The Permanent Committee for Scholarly Research and Ifta' reviewed the letter that reached the Grand Mufty from His Eminence the General Director of Awareness and Guidance Department under the General Presidency of the Committee for the Propagation of Virtue and the Prevention of Vice (CPVPV), that is assigned and transferred to the Committee from the Secretariat General of the Council of Senior Scholars, numbered (Part No. 11; Page No. 85) 2997, dated 15/6/1421 A.H., asking His Eminence the following question:You can find attached to this letter some enclosures for advertisement and propaganda concerning personal loans issued from some banks in the Kingdom of Saudi Arabia. Many Muslims are involved in such loans. Thus, I hope that you submit these enclosures to the Grand Mufty in order for us to know the legal ruling on such transactions, taking into consideration that many banks seek promptly to introduce them to people by either distributing them in their sites at times or by correspondences at other times.

After the Committee examined the Fatwa request, it replied that taking out bank loans is prohibited, because it is Riba (usury/interest). If this is the case, then circulating and promoting them are also prohibited, as they help in sin and transgression. Allah (Exalted be He) says: Help you one another in Al-Birr and At-Taqwâ (virtue, righteousness and piety); but do not help one another in sin and transgression. And fear Allâh. Verily, Allâh is Severe in punishment. May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.