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Investing In Companies That Earn Interest Directly Or Indirectly
I asked this question before but was not convinced with the answer as I didn’t understand it. My question is that if I have bought shares in a company abroad is it ok? I was told that every company operates on interest even in Pakistan. In that investing in any company that takes interest, is it ok or not?
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1 Reply
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Investing In Companies That Earn Interest Directly Or Indirectly
updated 3 years ago
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Directly investing in Banking Stock would be considered impermissible because currently, significant income of a Bank is from ‘Riba based activity‘.
Please see for details:
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Investing in a company whose primary revenue-generating activity is permissible but it also earns interest through term deposits in a bank or other investements in banks as part of its financial management plan, would not be considered prohibited in a direct sense. Since primary activity of such a company is Halal, therefore, one can invest in such a company. However, if one finds a better investment alternative, where even this kind of interest earning activity can be gotten rid of, then it is recommended to prefer that alternative.
Please refer to the following response by Ghamidi sahab which addresses this point from a principle stand-point:
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