Is it permissible to use the wealth gained from interest in order to avoid joining the army? Considering that we do not have Islamic banks here.
If the matter is as you describe, that kufr is allowed in this army and prayer and reading Qur’aan are not allowed, then there is nothing wrong with paying money in order not to join up, and it is permissible to avoid it by all Islamically acceptable means.
It is not permissible to deal in riba, whether by giving or taking loans, and it is not permissible to make use of or benefit from interest. The one who is faced with that has to repent from dealing in riba and get rid of this interest by spending it on the public interest; he has no right to benefit from it himself. This has been discussed in the answer to question no. 20876 and 45691.
If this money has come to you from someone who has repented and wants to get rid of it, there is nothing wrong with you making use of it in the manner you mentioned, or in some other way, because it has come to you in a permissible manner, and the prohibition applies only to the one who acquires it.
It is permissible for the penitent himself to make use of this money that he acquired in a haraam way if he has repented from riba and resolved not to go back to it again, and he needs to make use of the interest that he already has in his hand to ward off harm from himself, as in the case asked about here. So it seems that it is permissible for him to make use of the interest in this case.
Ibn al-Qayyim discussed at length the issue of getting rid of haraam wealth, and he stated that the way to get rid of this wealth and repent fully is: by giving it in charity, but if he is in need of it, then he may take as much as he needs, and give the rest in charity. See: Zaad al-Ma’aad (5/778).
Shaykh al-Islam [Ibn Taymiyah] (may Allaah have mercy on him) said: If this prostitute and this wine-seller repent, but they are poor, then it is permissible to give them as much of this money as they need. If he is able to do business or a handicraft such as weaving and spinning, then he should be given enough as capital (to start a business). End quote from Majmoo’ al-Fataawa (29/308).
But it is not permissible to carry on dealing in riba in order to make use of the interest to pay fines, taxes and the like.
And Allaah knows best.