Is it permissible for a charitable organization to use the interest accrued on its funds deposited in commercial Indian banks – due to the absence of Islamic banks – to finance general charitable projects for poor Muslims, such as infrastructure, schools, health centers, and industrial projects?

It is permissible to use usurious gains for general charitable projects that benefit people, such as schools and hospitals, or to disburse them to the poor and needy, as this is their designated use. This is what Imam An-Nawawi and other scholars have stipulated, reasoning that illicit money whose owner is unknown or despaired of being known must be spent on the general welfare of Muslims or given in charity to the poor, and it is not permissible to destroy it.

Nevertheless, financial institutions and businessmen should be pressured to establish Islamic banks that adhere to Sharia regulations.