Bank interest and giving zakat to sayyids

Question

Some time ago an istifta’ (request for a fatwa) was sent from Shrivardhan, and in connection with it a few things need to be clarified. The question was: should the interest (usurious increase) that the bank pays be taken or not? If it is taken, what should be done with it? Should it be destroyed or given to the poor? Among the poor, may it be given to sayyids or not? Or may a school be built with it, or a urinal and toilet for the school, or a urinal and toilet for the general public, or not?

Answer

The prohibition of interest (riba) is established by a categorical text (nass qat‘i), and the bank has not been exempted from it; therefore it is haram. If the interest is not collected from the bank, it is used for purposes contrary to Islam, the harm of which is obvious; to guard against this harm it should be collected from there, but then not used by oneself, because it is…

Source: Fatawa Mahmudiyya

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