[Q 168] Islamic Clarification Regarding the Purchase of Shares

  • Banking
  • 1 min read


Some leading Islamic Finance scholars permit buying/selling shares, if certain conditions are met. Could you kindly explain in a little more detail why do you consider it to be impermissible? 

بسم الله الرحمن الرحيم

الجواب بعون الملك الوهاب اللهم هداية الحق والصواب


Buying shares means that you are becoming a partial owner of the company and a partner in the business. Therefore, if the company is involved in unlawful activities, you will also be a part of it.

Currently, some Islamic finance scholars also allow the purchase of shares of a company whose income includes less than 5% of interest income and which takes interest-bearing loans upto certain limits. How can the purchase of shares of such a company be called an Islamic investment?

Then, the preference shareholder actually makes a usurious agreement, meaning that even if the company is going into loss, it still has to pay profit to  the equity shareholder who buys the share agrees to pay interest.

I have explained briefly. 

Answered by: Mufti Sajid Attari

Translated by: Usman Attari 

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