Ruling on salary advances from some Islamic banks with a fee
Question
What is the ruling on a salary advance from some Islamic banks, where the bank recovers the amount without increase but charges a fee for the transaction?
The shaykh’s answer in brief
Shaykh Sulayman ibn Salimullah al-Ruhaily
The shaykh described the case as the bank paying the employee his salary before its due time and taking something called a fee, and ruled that this is impermissible and a form of riba.
His reasoning: it is a purely financial benefit exchanged for a purely financial benefit with an increase, so in reality the bank lent the employee the salary with an increase it labeled a fee.
He added that it is not permissible even though some Islamic banks practice it.
Details and conditions as the shaykh gave them
- Calling it a “fee” does not change the ruling for him; the reality of the transaction is what counts.
Evidence and reasoning mentioned in the answer
- The stated reason: a purely financial benefit for a purely financial benefit with an increase (a loan with an increase). He cited no verse or hadith in this answer.
Short excerpts from the answer (Arabic)
«هذا لا يجوز وهو من الربا»
«فحقيقة الأمر أن البنك أقرض الموظف الراتب بزيادة، سموها رسوما»
«وإن عمل به في بعض المصارف الإسلامية»
Excerpts matched the book text literally after normalising diacritics and spaces.
Sources
- Shaykh Sulayman ibn Salimullah al-Ruhaily — Fiqh of Financial Transactions (2) — a course at Jami‘ al-Salaf al-Salih, Sharjah (printed text issued by the Department of Islamic Affairs)
Q&A section: Third question of a Q&A section of the course. No date is given on the page. Book file: https://www.sualruhaily.com/upload/book1505909130631.pdf
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