What is the ruling regarding the personal use of profits earned through depositing money in banks in Pakistan?

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Last Updated on 16th July 2021

Huzooraa was asked regarding the personal use of profits earned through depositing money in banks in Pakistan.

In a letter, dated 26 November 2018, Huzooraa gave the following reply:

“Banks in Pakistan usually accept deposits on the basis of the PLS method, which is a participatory banking system based on profit and loss sharing. Any wealth gained by depositing money into such a system does not fall under the category of interest.

“Similarly, profits gained through the money deposited in state-owned banks are not considered interest because they invest their capital on philanthropic projects, as a result of which various schemes are devised for the benefit of the citizens of the country, the economy grows and employment opportunities are generated. Therefore, the profits from such banks can be utilised for personal needs.

“As far as interest is concerned, the Promised Messiahas has defined it as follows: an individual lending money to another solely for their own benefit while predetermining the loan repayment as interest. When these conditions apply, then it is considered interest.

“Islam prohibits interest which takes advantage of the helplessness of the poor by fixing a certain amount of interest in advance when lending to them, thereby subsequently burdening the poor with interest upon interest and putting them in the chains of never-ending debt and interest. However, in the present times, if a person cannot afford to repay a loan and is forced to file for bankruptcy, then that debt can be dissolved.

“This is why the Hakam and Adl of the age, the Promised Messiahas has said, ‘Now, most of such matters in this country have turned upside-down. Every trade has an aspect or two that are based on interest. This is why renewed ijtihad is needed in this era.’

“In light of this guidance of the Promised Messiahas, the Ahmadiyya Muslim Jamaat continues to investigate and research into various issues in this regard whenever they arise and even currently, further research is being conducted on this matter.”

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