❀ Shar‘i Ruling on Profits from National Savings Schemes ❀
✦ Taken from: Fatāwā ʿUlamā’-e-Ḥadīth, Kitāb al-Ṣalāh, Vol. 1
Is it permissible to earn profits through National Savings Schemes?
National Savings Schemes offer various types of accounts, some of which provide fixed monthly or annual profit.
Such fixed profit falls under the category of Riba (usury/interest), which is explicitly prohibited in Islam.
Some scholars regard P.L.S accounts as a permissible form of Muḍārabah (partnership), since they are claimed to be based on profit and loss sharing.
However, in practice, these accounts are still part of an interest-based banking system.
In our view, since banks operate fundamentally on an interest-based system, it is necessary to avoid all forms of dealings with them, whether it involves a P.L.S account or any other savings scheme.
① National Savings Schemes or bank-based profit models that guarantee fixed returns are forms of Riba and thus prohibited (ḥarām) in Islam.
② P.L.S accounts, despite their appearance of legitimacy, remain part of a riba-based framework, and should therefore be avoided.
③ It is more prudent and religiously sound to abstain completely from these usurious dealings.
Reference:
Based on Islamic teachings and foundational principles of Islamic jurisprudence (Fiqh)
✦ Taken from: Fatāwā ʿUlamā’-e-Ḥadīth, Kitāb al-Ṣalāh, Vol. 1
❖ Question:
Is it permissible to earn profits through National Savings Schemes?
❖ Answer:
❖ General Ruling on National Savings Schemes:
National Savings Schemes offer various types of accounts, some of which provide fixed monthly or annual profit.
Such fixed profit falls under the category of Riba (usury/interest), which is explicitly prohibited in Islam.
❖ About the P.L.S (Profit and Loss Sharing) Account:
Some scholars regard P.L.S accounts as a permissible form of Muḍārabah (partnership), since they are claimed to be based on profit and loss sharing.
However, in practice, these accounts are still part of an interest-based banking system.
❖ Avoiding Interest-Based Systems:
In our view, since banks operate fundamentally on an interest-based system, it is necessary to avoid all forms of dealings with them, whether it involves a P.L.S account or any other savings scheme.
✔ Summary:
① National Savings Schemes or bank-based profit models that guarantee fixed returns are forms of Riba and thus prohibited (ḥarām) in Islam.
② P.L.S accounts, despite their appearance of legitimacy, remain part of a riba-based framework, and should therefore be avoided.
③ It is more prudent and religiously sound to abstain completely from these usurious dealings.
Reference:Based on Islamic teachings and foundational principles of Islamic jurisprudence (Fiqh)
