Q&A: Working in a bank or financial sector?

The following is a question we received from one of our readers and our answer: 

Question: Please can you explain whether working in a bank is permitted and if so in which type of positions, for example is supporting the IT or software in the bank permitted? Also the same question for the financial sector in general i.e. stock markets, insurance, etc.

Answer:

The following is an extract from english translation of 'The Economic in Islam' by Sheikh Taqiuddin an-Nabhani' that sheds light on the matter:

"The Rule Regarding Hiring Over Prohibited Benefits
In order that hiring be legally valid, the benefit must be permitted (halal) in nature. So the employee should not be hired for doing something which is prohibited. Accordingly a worker should not be hired to carry alcohol to one who buys it, or to press it. Nor should he be hired to carry pigs or carrion. At-Tirmidhi narrated from Anas bin Malik, who said: "The Messenger of Allah (SAW) cursed ten types of people regarding alcohol: its presser, the one who asks for it to be pressed, its drinker, its carrier, the one to whom it is carried, the one who serves it, its seller, the one for whom it is sold, its purchaser and the one for whom it is purchased." Hiring is also not allowed over any work of usury, because it is a hiring over a prohibited benefit, and because ibn Majah narrated from ibn Masoud that the Prophet (SAW) cursed the one who takes usury, his agent, its two witnesses and its recorder (clerk). The employees of banks and coinage (minting) departments and all the organisations that deal with usury have to be examined. If the work they were hired to do is a part of the usury work, whether the usury is the product of that work exclusively, or whether it is produced by that work along with others, Muslims are prohibited to perform such works. This includes the manager, accountants and auditors and every work that provides a benefit connected with usury, directly or indirectly. But the work that is not connected with usury directly or indirectly, such as the porter, the guard, the cleaner and the like, these works are allowed, because it is a hiring on an allowed benefit, and because what applies on the recorder and the witnesses of usury, does not apply on them. Similar to the employees of banks are government employees who are involved in deals with usury, such as employees who work in preparing loans with interest to farmers, and Treasury employees who are involved in usury works, and the employees of the orphans departments which lend property with interest. All these are prohibited jobs; anyone who is involved with them is committing a great sin, because it is applied on him if he is the recorder or the one who witnesses usury. Similarly it is prohibited upon a Muslim to engage in any work prohibited by Allah (SWT).

With regard to the work, whose profit or association in it is prohibited because it is legally invalid such as insurance companies, share holding companies and co-operative associations and the like, they have to be examined. If the work that the employee performs is illegal, or it is of an invalid (batil) or defective (fasid) contract, or results from them, a Muslim is not allowed to handle it, because a Muslim is not allowed to deal with invalid or defective contracts or with the actions which result from them. He is not allowed to deal with any contract or action which disagrees with the hukm shar’i (divine rule), so it is prohibited for him to be hired for involving in them. This is like the employee who records insurance contracts though he dislikes them, the one who negotiates the insurance terms, or the one who accepts the insurance. Similarly is the case of the employee who distributes the profit of the co-operative associations according to the member holdings, and the employee who sells company shares or who works in share stock accounting, and also like the employee who advertises for the co-operative associations and the like. All employees of companies, whose work is legally allowed to be performed, are allowed to be employed in such positions. If a person is not legally allowed to perform a work for himself then he is not allowed to be an employee for doing it because he is not allowed to be hired to do it. So actions which are prohibited to be conducted, the Muslim is prohibited from hiring others to it or to be hired himself to do it."

Regarding working in supporting the IT of a bank or financial institution the following is from a Q&A related to the subject:

"There are three relevant principles in this regard.
1. To do something prohibited is prohibited.
2. That which is predominantly believed to lead to something prohibited is prohibited.
3. That which is directly connected to something prohibited is prohibited.
So a riba-contract is prohibited. And writing it is prohibited, as stated in ahadeeth.
The development of a computer program which calculates interest is not prohibited as such, because the development of computer programs as such is permissible.
However, when it is directly connected with something prohibited (like riba), it is prohibited, too. For example:

If one gets order from a bank to develop an application which will (among others) be used to calculate interest (riba), then this is directly connected. In this case, the development is prohibited. It is regarded as assistance. If one was to develop such a computer program independently (without an order from a bank) and sell it on the market, then it would be permissible (even if among the buyers there were banks that bought and used the software). This is because there is no direct connection to something prohibited, therefore it cannot be regarded as assistance.

Another example: If someone works in a bank as a technician, who maintains computers which are used for prohibited things, then this is prohibited, for it is directly connected. His work means assistance. If he was ordered by the bank to deliver pizza to their personnel, this would be permissible, because it is not regarded as assistance and there is no direct connection to anything prohibited.

Most of the cases in question deal with matters which are directly connected with something prohibited.

For example: As said, the development of programs calculating interest itself is permissible. Like someone working for Microsoft doing such a job, if they want to sell it on the market without a direct connection to its actual practical use. If the same person was ordered to do so directly by a bank, it would be prohibited because it means assistance."  (Islamic Revival) 


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