Is Riba allowed in a non muslim country like America or Canada?
I have read a hadith, that says “There is no riba between a muslim and a harbi (kafir) in “dar ul harab”. (Dar ul harab means a non muslim country.) Is it allowed in a non muslim country?

In the name of Allah, the most Beneficent, the most Merciful.

Answer

A place may be classified as Darul Harb if the following conditions are
found:

• The government implements total un-Islamic law in the country, to such an extent that Muslims are not able to practice their religion freely.
• This state is surrounded by other states with similar conditions
  (un-Islamic) and not surrounded by an Islamic state.
•  Peace and safety of Muslims is in danger. They may attacked at anytime, because of them being deprived of safety from the side of the government. (Ahsanul Fatawa p.21 v.6)

From the aforementioned conditions we can deduce that Canada and other western countries like the USA and UK will not be considered as Darul Harb.

The view of Imam Abu Hanifah (RA) and other past juries was that interest transactions with non-Muslims in Darul Harb are permissible. (See Hidiyah p.86 v.3)

However, the majority of the scholars of the Hanafi Fiqh have retracted from this position of Imam Abu Hanifah (RA). The reason for this is so that the severity of interest and riba remain in the hearts of the Muslims. (Ahsanul Fatawa p.20 v.7 &  Kifayatul Mufti p.77 v.8)

It is narrated by Makhul that the Prophet of Allah Sallallahu Alahi Wasalam has said, “There is no interest between a Harbi” (I’laaus Sunan p.345 v.14)

Only Allah Knows Best

Mohammed Tosir Miah

Darul Ifta Birmingham