What is the difference between interest and a loan, and what is their relation to usury? Are the bank interests resulting from a client's contribution of capital and the bank's contribution of effort in massive projects considered haram by analogy to prohibited loans? And do bank interests enter into projects, and how can they be haram when they are a type of partnership?
Usurious profits are forbidden, while permissible profits are those resulting from trade. Allah Almighty says: "Allah has permitted trade and forbidden usury." Usurious banks base their work on lending and borrowing with usurious interest. As for Islamic banks, they invest their clients' money in commercial projects and permissible transactions, so their profits are lawful.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
Read the full answer on Ftawyhttps://ftawy.com/en/questions/120990