Investing in companies which occasionally deal with banks

12/01/2011| 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 Allah bless you.

 

Fatwa:

 

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 all Halaal, such as Islamic banks etc. Trading in these shares is absolutely Halaal.

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

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

A- Trading in these shares is also Haraam, 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 put off the percentage of this usury from his profit.

However, the Islamic Fiqh Council 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.

 

Fatwa answered by: The Fatwa Center at Islamweb