Borrowing Money Laws at Banks According to Islam

Who has never borrowed money? Of course both people who are or people who are less materially borrowing money are normal and are naturally in accordance with human nature according to Islam or human concepts in Islam. Assets in Islam are also the most important part so that people can move, do charity, and carry out their life goals. Every human being who lives there sometimes needs a loan and needs to be helped to meet his needs. Needs can be primary, secondary, or tertiary.


Even among the upper class people, of course, they often borrow and borrow money that can be used for tertiary purposes or develop their business and capital. Even the lower classes can also borrow money to fulfill their primary needs, from food, health needs, education, or other household needs. For this reason it is necessary to help one another, and to avoid the arrogant nature of not caring (the arrogant nature of Islam is something that is hated by Allah SWT).

In Islam borrowing and borrowing (debt) is something that is not prohibited. Islam regulates it and even allows it, provided that it is not of usury and is contrary to the basics of Islam in the pillars of Islam and in harmony with faith. None of the rules of Islam harm or even plunge. For this reason, the benefits of believing in Allah SWT, to the details of economic issues, Islam regulates it. In this case the example is the problem of mawaris in Islam (family property) and bank interest according to Islam.

However, developments in this era are developing as well as discussions about the law of borrowing money through banks. Some opinions say that this is haram because it includes usury.

To be able to understand it, here are two conflicting opinions about the law of borrowing money at a bank.

Bank type

Before knowing the different opinions regarding the law of borrowing money at a bank, then of course it is necessary to know in advance the type of bank that exists. In general, Muslims divide it into two, namely Islamic banks and conventional banks.


Conventional Bank
Conventional banks are banks that in implementing their service systems use economic processes in general. Conventional banks generally use the interest system and prioritize profits. Determination of interest and other provisions are made when the agreement is made on a profit basis The percentage given is based on the amount of money or capital lent. The existence of bank interest, still has to be paid without seeing whether the customer is profit or loss. However, interest payments do not increase even if the amount of profit is multiplied (the interest is fixed).

Islamic Bank
Islamic banks are banks which in their application use rules or Islamic sharia. Islamic banks do not use interest as applied by conventional banks in general. The system of Islamic banks is a partner or cooperation while the amount is made at the time of the contract based on the possibility of profit and loss. If there is a loss, then the loss will be borne jointly by both parties. While the distribution of profits increases according to the increase in income.

The following is an explanation of the law of borrowing money at the bank:

Allowable Opinion to Borrow Money at Conventional Banks
According to Rasyid Ridha
Rasyid Ridho is one of the scholars who brought the spirit of Islamic renewal in the modern era. He expressed his opinion regarding the Bank's Interest in Conventional Banks. He said that the word Al-Ariba contained in QS Ali Imron verse 130 is usury or an addition that is doubled or adh'afan mudha'afah.

Usury in the period of the decline of the Koran is the advantage that is collected together with the amount of debt that contains elements of persecution and oppression, not just the excess or the increase in the amount of debt owed to the debtor.

According to M Quraish Shihab
Quraish Shihab is one of the scholars who supported the thoughts of Rashid Ridho. He said that bank interest in conventional banks was not the same as Riba. For this reason, he explained this in relation to the verse in the verse Al-Baqarah verse 278 along with the historical context when the verse came down.

The sociological background which is the cause of the decline in the verse on the prohibition of usury in the Koran is the behavior of the jahiliyyah people who multiply the return of the principal debt lent to debtors who are in dire need.


According to Umar Shihab
Prof. Dr. H. Umar Shihab in his book entitled Islamic Law and Thought Transformation explained that bank interest collected and given to customers was far smaller than the amount of interest or usury treated in the jahiliyyah period. Whereas, in the time of the Prophet Muhammad, the people who gave loans and collected usury got far greater profits because they had multiplied payments.

If seen in the present, we do not see the same thing, in fact, profits occur on both sides, between the borrower and the lender or the creditor and debtor. Therefore, bank interest cannot necessarily be forbidden because it is far different from what was practiced in the ignorance era. While Umar Shihab himself believes that bank interest is analogous to buying and selling based on liking.

From this, scholars who agree on the notion of usury, the meaning of usury, and the law of usury in Islam are associated with bank interest in the context of today, do not equate between usury and bank interest. Some other scholars also say that the existence of bank interest in conventional banks is a reasonable addition and indeed in accordance with applicable economic laws.


In General Opinion
We can see that the interest charged to customers also has functions for payment of services such as ATM cards, ATM machines wherever they are, other banking services, bank teller services, inflation that will never know when and when and other conditions which is without interest, the bank will lose money. And if there is inflation, of course our money will be safe because there are flowers that accompany our savings. This is a consequence of the development of technology, so the development of Islam in terms of the law will certainly follow it.

For this reason, according to some contemporary scholars, bank interest is not usury and borrowing from a bank is not prohibited and does not conflict with the function of Islamic religion. This shows that Islam and economic science are complementary and filling. Islam as a basis and economics as a development theory for application in a growing context.

Including the law of working in a conventional bank for Muslims is not prohibited, while there is no single work rule that violates the substance and basic principles of Islam. For example, not opening aurat, not committing fraud, not extorting, acts of injustice that harm many people, and so on according to Islamic law.

Opinions that do not allow borrowing money at conventional banks
The existence of differences of opinion or controversy regarding usury by the scholars is due to differences in understanding the purpose or illat contained in the verses of the Qur'an regarding usury and the problem of the danger of debt in Islam through conventional banks.


Classical Fiqh scholars with a method of understanding verses that tend to be textual and formalists understand that all additions in the economy (buying and selling) are imposed as usury. Whereas contemporary scholars regard it not as usury because it understands the substance approach and the things that make usury become illegitimate seen from its sociological context.
Here is one of the contents of Majma 'Al-Buhuts Al-Islami, in the second conference, held in Cairo, in 1965 which became a reference for scholars to determine the prohibition of borrowing money in Conventional Banks. "Interest from debt transactions, all are illegitimate usury. It makes no difference, both debt for consumer activities and debt for productive activities. Because the Qur'anic and Sunnah arguments, all expressly state the illegitimate of the two types of usury from the debt. "(Fawaidul Bunuk Hiyar Riba, p. 130)

From the opinion of classical scholars and also scholars who are oriented to the text method, then getting a money loan in a conventional bank is unlawful. Whereas anything done in a conventional bank without sharia considerations is haram.