Fatwa No : 85287
Ruling on Meezan Bank and Bank Islami

Ruling on Meezan Bank and Bank Islami

Respected Mufti Sahib, I would like to obtain information regarding Islamic banking. Is it truly Islamic banking in reality? Does this bank take interest (usury) or not? I also want to know about Meezan Bank. I have heard that the advisor (patron) of this bank is Maulana Taqi Usmani Sahib, who is associated with Darul Uloom Karachi, Korangi. Kindly send me the details as soon as possible. I shall remain grateful to you.

الجوابُ حامِدا ًو مُصلیِّا ً

Meezan Bank, Bank Islami, and similar banks follow certain business formulas explained by some scholars. Although these formulas are far better than those of conventional banks and closer to the principles of Shari‘ah, the individuals operating this system are often unfamiliar with Shari‘ah rulings. Due to their lack of understanding, they frequently make mistakes in applying these transactions and formulas. Such mistakes are not due to flaws in the actual framework, but rather due to the misunderstanding and errors of the concerned individuals, which in turn render the executed transaction impermissible in Shari‘ah. Furthermore, since these institutions are non-governmental and private, there always remains the possibility that their rules and regulations may change. For this reason, many scholars declare the investments made through these banks to be impermissible and unlawful. However, if the basic formulas are applied correctly, and the transactions are carried out under the supervision of a reliable Shari‘ah advisor well-versed in Islamic rulings, or if the entire procedure and contract are presented in writing to a trusted Dar al-Ifta and verified to be correct, then conducting business with such a bank will also be permissible and valid in Shari‘ah. On this point, there is no difference of opinion.