Is it permissible for a poor retiree who is unable to work to deposit his money in a bank to obtain a monthly income, and is Zakat obligatory on these funds if the income barely covers the necessities of life and he may have to draw from the principal?

It is not permissible to deposit money in a usurious bank, and the money deposited in this type of bank must be withdrawn immediately. Usurious interests must be given in charity for the public welfare of Muslims or to the poor and needy. A poor person in need may benefit from it. Zakat (definition) is obligatory on the principal amount if it reaches the nisab (definition) (the equivalent of 85 grams of pure gold or 595 grams of silver), and a quarter of a tenth (2.5%) must be given annually.