Praise be to Allah.
Putting money in the bank for interest is emphatically forbidden, and is a major sin. Allaah says (interpretation of the meaning):
“O you who believe! Be afraid of Allaah and give up what remains (due to you) from Ribaa (from now onward) if you are (really) believers.
279. And if you do not do it, then take a notice of war from Allaah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums)”
It is not permissible to put money in a riba-based bank except if there is the fear that the money may be stolen etc, if there is no other means of protecting the money except by putting it in the bank. In that case it is enough for him to put it in a current account that does not bear any interest, because in cases of necessity, things that are ordinarily forbidden may be permitted, but only to the extent that is necessary.
If a person has engaged in riba, then he has to repent to Allaah by giving up the sin, regretting what he has done, resolving not to go back to it, and getting rid of the haraam interest by spending it on charitable causes. He is not allowed to benefit from it himself or spend it on those on whom he is obliged to spend.
Shaykh ‘Abd al-‘Azeez ibn Baaz (may Allaah have mercy on him) said: With regard to the interest that the bank has given to you, do not give it back to the bank and do not consume it yourself; rather spend it on charitable causes, such as giving it to the poor, repairing public washrooms, and helping debtors who are unable to pay off their debts. End quote from Fataawa Islamiyyah (2/407).
It is permissible for you to get rid of this interest by giving it to your brother who is in need, on condition that it is not obligatory for you to spend on him, so that that will not be a trick to enable you to benefit from it and save your own money that you would spend on him if you had to. A man is obliged to spend on his brother if three conditions are met:
1-The one who is spending would inherit from the one on whom he is spending if the latter died. But if the brother would not inherit from his brother because the father is there or because the brother has a male child, then spending on him is not obligatory.
2-The brother on whom he is spending is in need and is unable to earn enough to make him independent of means.
3-The one who is spending should have wealth that is surplus to his own needs and those of his wife and children.
If these conditions are met, then it is obligatory for a man to spend on his brother.
See also the answer to question no. 6026.
There is nothing wrong with getting rid of this interest by giving it to your brother to pay off his debts, even if it is obligatory for you to spend on him, because a man is not obliged to pay off his relative’s debt in all cases, whether it is his father, brother or anyone else. Hence the most correct view concerning zakaah is that it is permissible to give zakaah to parents and siblings to pay off their debts, as was the view favoured by Shaykh al-Islam [Ibn Taymiyah] and others.
See: al-Ikhtiyaaraat al-Fiqhiyyah, p. 104.
For more information, see question no. 39175.
Conclusion: It is permissible for you to give the interest to your brother to pay off his debts, whether you are obliged to spend on him or not.
As for giving him the interest to spend on himself and his family, not to pay off his debts, that is permissible so long as it is not obligatory for you to spend on him.
And Allaah knows best.