السلام عليكم ورحمة الله وبركاته
With regards to your query, please be informed of the following:
1. An overdraft is a credit facility which a bank provides to an account holder, in terms of which he is enabled to draw money in excess of the funds he actually holds.
2. This facility is usually provided against the payment of interest calculated on the excess drawn.
3. From a Sharīʿah perspective an overdraft involves three elements:
3.1. a loan from the bank to the account holder;
3.2. repayment of the loaned capital;
3.3. and the interest payable on that loan.
4. While the act of lending is money is in principle deemed a highly meritorious act, the association of interest with repayment turns it into one of the most repugnant acts in the Sharīʿah—an act against which Allah declares war in the Qurʾān.
5. As such, both the giving and taking of overdrafts is ḥarām.
والله تعالى أعلم
And Allah knows best.
(Issued in September 2017)