Is working as a bank teller haram?

Dear Hadi,

Dear Reader,

Thank you for your question.  We presume your uncle's concern stems from a worry that you are working in an industry that may be involved with riba (usury) which of course is prohibited in Islam.  While we appreciate his concern, we don't believe that this necessarily means you need to quit your job.

Please remember that we do not give fatwas in this column, but we will provide you with our opinion which we arrive at often in reliance of fatwas by various scholars.

The first question we think should be asked is, what exactly are you doing as a teller?  

If your work consists primarily of ordinary teller duties - serving customers, handling deposits and withdrawals, cashing checks, assisting with account services, answering questions, and performing other routine banking functions - and you are not yourself writing, calculating, approving, selling, or directly facilitating usury, then we see no reason that your employment would be impermissible.  

The next question involves the issue of riba itself.  As we mentioned, there is unanimous agreement that riba is prohibited in Islam.  The Prophet (pbuh) strongly warned against participating in riba. In Sahih Muslim, Jabir (may Allah be pleased with him) reported that the Messenger of Allah cursed the one who consumes riba, the one who pays it, the one who records it, and the two who witness it, saying that they are all alike.

That being said, you may be surprised to learn that there is disagreement among Muslims as to what exactly constitutes riba, and whether modern-day bank interest falls into that category.  To give our opinion (not a fatwa) on this topic, we will quote excerpts from an earlier answer we posted on this column, and here is the link to the fuller, more in-depth answer given there:  What can I do with interest from the bank?

The etymology of the word riba itself is that it means “increase”particularly when used in financial transactions.  The practical implementation of the meaning, however, has taken multiple forms among scholars:

1. The simplest, and probably most widespread definition, equates riba with interest of any kind, whether personal transaction between individuals or bank deposits or loans.
2. However, multiple other interpretations exist, including equating riba with increases only on specific commodities, such as gold, silver, and certain food stuffs.
3. Still other interpretations equate riba only to excessive interest tantamount to the English term “usury.”
4. Yet other interpretations do not focus on whether the interest is small or big, but on whether the economic situation represents an exploitation of a needy or poor person.

Given the different meanings and shades of meaning of the term, it becomes important to precisely define the issue and try to come to a conclusion on whether or not modern financial transactions such as interest-bearing bank accounts fall under the riba which the Quran and hadith forbid.

We do not believe that the interest you receive on savings accounts in the bank is haram. This applies both to fixed interest rate deposits, as well as to variable interest earnings on such things as commodities investment accounts.  

We base our opinion on the thoroughly studied fatwas beginning in 2002 from the Institute of Islamic Jurisprudence of Al-Azhar University, as well as Grand Muftis of Al-Azhar, such as Mohammed Sayed Tantawai and Ali Gomaa.

Very briefly, the opinion of Al-Azhar scholars is based on two foundational pillars:

1. The current banking industry, and the financial relationships between a bank and its customers, whether they are placing deposits or taking loans, is a very modern invention, not present at the time of the Prophet (pbuh) or the early generation of Muslims, and therefore requires a separate jurisprudential analysis, rather than trying to apply very specific rules meant to curb an exploitative practice in early Arabian society to current financial transactions.  The crux of the matter here is that when you deposit your money in a bank and the bank gives you interest on that money, this is an investment sort of relationship, where the bank takes your money, invests it in various areas in society, makes a profit, and gives you a part of that profit as interest. This is entirely different than a needy person requiring money to support himself or his family, and being exploited by a rich person who forces the one in need to pay an exorbitant interest rate on money he has borrowed.

2.  In financial transaction terms, the Al-Azhar scholars believe that the rules of riba apply to gold and silver, and not to any financial instrument, such as bank notes or paper money. That is because gold and silver have a fixed value, where things such as inflation change the worth of paper money, vis-à-vis gold and silver. With the abolition of the gold standard in the late 20^th century, the scholars felt that a reappraisal of banking financial transactions was necessary.

It is important to note that the viewpoint endorsed by Al-Azhar University has roots that stretch back over a century, to such scholars as Rashid Rida in his Tafseer Al-Manar which appeared in the early 20^th century. 

Also, the well-known scholar Fazlur Rahman provided a very comprehensive and most compelling argument in a long academic paper called “Riba and Interest” published in 1964. In that paper, he argues that the Quran discusses a practice already in existence in Arabia, without the need to specifically define it since it was known to all who heard the revelation.  That practice was the loaning of money at a certain interest rate, which was not itself considered exorbitant.  However, if the debtor was unable to pay the loan back at the end of the specified loan period, he would be given more time, but at an exorbitantly high interest rate so as to take advantage of the poor debtor who could not meet his initial obligations; this was defined as riba and was prohibited.  To quote directly from that paper, Professor Rahman states that “In short, the riba of the pre-Islamic days, which was categorically declared haram by the Quran, so that those who indulged in it were threatened with war from God and His prophet, was of an atrocious kind and went on multiplying in a manner that the poor debtor, in spite of his regular payments, could not pay off the usurious interest let alone the capital.”

In short: riba is unquestionably haram, and a Muslim should avoid directly participating in it. But for the reasons we note above, we do not believe, and God knows best, that working as a bank teller is haram merely because the employer is a bank, and the bank deals in interest.  That being said, we encourage you to read various opinions and reach a decision that you ae comfortable with.  

In peace.