Is it permissible to dispose of money received as debt repayment, given the suspicion that its source is part of unlawful earnings that were distributed to the needy and then returned as debt repayment?
For participation in the employee savings fund to be permissible, it is stipulated that the fund's money must not be invested in prohibited projects. Placing money in interest-based banks and taking interest from them is religiously forbidden (haram), and it is not permissible for the employee to own these interest earnings because they are ill-gotten gains (mal khabith). Rather, one should take them and spend them on general Muslim welfare, such as for the poor and the needy. It is permissible to deal with a poor person regarding this money through purchase, debt repayment, or gift, as ill-gotten gains are forbidden for the one who acquired them through illicit means, but they are permissible for one who takes them rightfully.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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