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Investing In Banking Shares With Principal Amount Secured
Asalam u alaikum!
I work for a bank. Every year our bank invites us to invest in its shares on a 20% discount for 3 or 5 years and if at the end of the term the shares have done well then we have the choice to keep the shares and earn dividend or sell them at the profit. Also if the shares haven’t done well then our savings are protected and we will at least get our savings back.
I was wondering if this is type of investment is allowed please?
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4 Replies
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Investing In Banking Shares With Principal Amount Secured
updated 1 day, 9 hours ago
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4
Replies
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There’s nothing inherently wrong in investments of any form if there’s no aspect of immorality (deception, unfairness, injustice, fraud etc.) involved. However, directly investing in Banking Stock would be considered impermissible because currently, significant income of a Bank is from ‘Riba based activity ‘.
Please watch:
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The investment mechanism being adopted is not objectionable. In fact, it is a recommended arrangement, in the light of the principles of justice and fairness, also known as “Principal Secured Financing“.
Please refer to the video below from 1:15:47 to 1:20:12
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Asalam u alaikum!
I am a bit confused about Your answer regarding income from the banks are from riba so is not permissible. Where as in the other video Ghamidi sb is saying that principal source financing is permissible even if it’s from the banks? Can you please explain?
Investing is shares does it not constitute principal sourced financing?
Also your answer has prompted another question about working for the bank. I work in IT sector of the bank with no direct links to any interest bearing product. Is my income halal?
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Investing in a bank is not appropriate now. But if the same kind of investment (as explained above) is done in any other sector whose primary revenue generating activity is not objectionable, then such mode of investment is fine.
Regarding job in a bank, please refer to the video below from 48:42 to 52:48
https://www.youtube.com/live/NyN171MwbmM?si=9MdU0pDzifVgitO1&t=2922
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