Investing in companies which occasionally deal with banks

18-10-2001 | IslamWeb

Question:

Is it allowed to trade in shares of companies whose main business is Halaal (like computers) but deal with banks by taking interest and loans from time to time? Is it allowed to trade in the shares of such companies if I do not intend to take any profit from the dividends? I will only take trading profit (profit from buying and selling the shares at a higher price). As you know, there are no shares of companies that do not deal in interest, to the best of my knowledge. Thank you and may Allaah bless you.

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Answer:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.

 

Shares from the Islamic point of view are of three kinds:

1 – Shares of companies whose dealings are entirely Halaal (lawful), such as Islamic banks etc. Trading in these shares is absolutely Halaal (lawful).

2 – Shares of the companies whose dealings are entirely. Trading in these shares is absolutely Haraam, such as usury taking banks.

3 – Shares of companies whose dealings are lawful, but they deal with usury-taking banks. Contemporary scholars hold two different opinions on this issue:

A- Trading in these shares is also forbidden, because usury is involved in the shares of the company.

B- Trading in these shares is lawful, but the percentage of usury should be little. And the participant should get rid of the percentage of this Riba (usury or interest) from his profit.

The Islamic Fiqh Committee in Jeddah prohibited this type of shares. Although the research is continuous on this issue, probably this opinion is correct because the jurists forbid the partnership of a usurer.

Allah Knows best.