Is it permissible to work in banks and insurance companies?

The Details of the Question
Is it permissible to work in banks and insurance companies?
The Answer

Dear Brother / Sister,

Two of the top bad habits and evils that Islam has struggled against and tried to eliminate are alcoholic drinks and prostitution since the beginning of Islam; and the third one is definitely interest. 

They were part of the life of the Jahiliyya (Ignorance) Arabs that were united with them and were part of their bodies. As a matter of fact, the term interest did not use to be heard in Islamic countries and communities for a long time. However, when the Jahiliyya beliefs and traditions started to rise again, they all came together. Alcoholic drinks, prostitution, gambling obscenity and interest are some of those evils.

For instance, when everything was imported from Europe, the economic life was largely arranged based on the system of interest. Thus, interest institutions emerged almost everywhere. Since the people who were going to work in the banks could not be imported, the people of our country had to work there. In the end, all of the vacancies were filled from directors, to officials, from workers to caretakers.

It is possible to evaluate the people who work in the institutions that operate based on interest in two forms: first; those who knew that the institution operated based on interest and that working there would make them responsible but started to work there due to the attractiveness of the financial benefits; second: those who started to work there in the past and did not heed whether it was haram or not to work there at that time and who did not even think that it could be wrong to work there.

It is a known reality that Islam has banned interest completely, that it has always struggled against it, that it has established various solidarity institutions that will block the ways leading to interest and that it has associated the peace and tranquility of the society with the elimination of interest. 

Since this is the case, will Islam approve the interest-based institutions that try to contaminate all of the commercial and industrial transactions including the savings of people with interest, that appall the feeling of solidarity and that eliminate the custom of borrowing and landing that ease the businessmen? There is no doubt that it will not.

Badiuzzaman says the following regarding the issue: « Profiting from banks, the doors of usury and interest, is for the infidels, who are the worst of mankind, and for the most tyrannous of the former, and for the most base of the latter. They are the cause of absolute harm for the World of Islam.» (1)

It has been forbidden and declared haram to deal with interest and transactions with interest both in verses and hadiths. The verse regarding the issue is as follows:

« Those who devour usury will not stand except as stands one whom the Evil One by his touch hath driven to madness. That is because they say: "Trade is like usury, but Allah hath permitted trade and forbidden usury.» (2)

Those who are involved in haram through interest are described as follows in a hadith: 

«Allah keeps anyone who devours interest, gives interest, who writes it and who witnesses in the dealing away from His mercy.» (3)

Although only those who devour interest are mentioned in the verse, he who devours, gives, writes and witnesses it are listed in the hadith, and they are all stated to be away from the mercy of Allah. 

Since this is the case, although those who work in interest-based institutions do not directly devour or give interest, they carry out the transactions of interest, calculate them, write them and manage those transactions. No matter if one is an official or a director, he is included in the notion of “writing” mentioned in the hadith. 

It is not something advisable for a person who knows those things to work in interest-based institutions. It is not possible to regard the excuses like, “I have not been able to find any other jobs”, “I must work there; it is an absolute necessity” as excuses that will justify a person and that will eliminate his responsibility. The sphere of what is halal and legitimate is wide enough to meet the needs of a person. 

The job he has found in a halal place may have a lower salary in comparison to the job in the interest-based institution but the salary will not be doubtful and shady. Besides, it is very difficult to regard working in an interest-based institution as necessity.

We hear statements like, “What is the difference between working in other government offices as officials and in an interest-based institution? The salaries paid to the officials are largely related to interest." First of all, not all of the officials are involved in carrying out interest transactions. That is, officials and workers are not directly involved in interest transactions. However, those who work in interest-based institutions are involved in interest calculations, contracts and transactions all day.

On the other hand, the revenues of the state are not collected only from interest transactions. Most of them are obtained from taxes collected from people and other similar resources. An official regards the salary he gets as the money collected from those resources. What is more, when a worker works in a legitimate business - for instance: building - of a person who makes money through illegitimate ways like gambling, trade of alcohol, etc, the wages that he receives from that person is licit and halal. Similarly, it is permissible for a Muslim to collect the money that a non-Muslim owes him from the money that the non-Muslim earns from wine. (4)

Although that money is obtained from a way that is religiously illegitimate, the situation is different for the person who is the creditor because he receives the money that the person owes him. That the money is obtained through illegitimate ways lays no responsibility on the creditor. The responsibility belongs to the debtor. The situation of the official is no different from that case because the official does something legitimate and he deserves to receive money. That money is paid by the state. Therefore, those who work in interest-based institutions cannot compare themselves with government officials.

Those who started to work in interest-based institutions a long time ago but later found out that it was haram to work there are not advised to go on working there if they find somewhere else to work. They must try to find a legitimate place to work.

In the meantime, they should try to carry out their spiritual and Islamic duties better and gain thawabs (rewards) because good deeds eliminate and purify bad deeds and sins.

It is necessary to state that one cannot say that all of the earnings of those who have businesses that are involved in haram and businesses that are involved in halal and do legitimate things there and earn money from those businesses are haram, and the situation is relieved a bit. It is not regarded haram to work in the legitimate and useful branches of those businesses like constructing roads, conveying water, doing electric works, etc. 

If there are interest-free insurance companies, it is permissible to work there.

1. Mektubat, p. 450

2. al-Baqara, 275.

3. Muslim, Musaqat: 105.

4. Durar, l: 318.

Mehmed Paksu, Helal Haram, Nesil Yayınları, 5. Baskı, İstanbul, 1998, pp. 25-29.

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