The ruling on transferring Money through Banks

Question :

Is it permissible for the Muslim to deal with the current banks that give extra money on top of the capital sum or increase the amount to be paid by one who takes out a loan from them?

Answer:

It is not permissible for the person to deposit his money in the bank and the bank to give him a guaranteed yearly increase, for example. It is also not permissible for him to take a loan from the bank under the condition that he will pay the bank an increase at the time that they agree upon for the person to pay back the borrowed money. For example, like him paying back 5% more when he pays back the loan. These two forms of transaction are included in the generality of evidences regarding the forbiddance of Riba from the Book, the Sunnah and the consensus (Ijma') of the scholars. This is clear, and all the praise is due to Allâh.

In reference to dealing with the banks for securing money without taking interest and transfers of money, if the person is not forced by necessity to put his money in the bank, then it is not permissible to put it in it. This is due to what that contains of assisting the owners of the banks in using it in Riba. Indeed Allâh said:
"And cooperate in righteousness and piety, and do not cooperate in sin and transgression."

If there is a need that calls for that, then we do not know of any harm in it, if Allâh wills. Regarding transferring money from one bank to another, even if it is for some increase that the transferring bank takes (as payment for the service), then that is permissible. This is because the increase that the bank takes is a fee that it gets in return for the job of transferring the money.

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