Ruling on Purchasing and Selling Bank Shares

Author: Dr. Muhammad Zia-ur-Rahman Azmi (رحمه الله)

Islamic Ruling on Buying and Selling Bank Shares

It is not permissible to buy or sell shares of banks because:

  1. It involves the exchange of money for money without meeting the conditions of equal value and immediate possession, which can lead to Riba (usury).
  2. Banks operate on an interest-based system, and engaging with such institutions financially constitutes cooperation in sin and transgression.
Allah ﷻ commands in the Quran:

"And cooperate in righteousness and piety, but do not cooperate in sin and transgression."
[Surah Al-Ma’idah: 2]

Furthermore, the Prophet ﷺ cursed those who:

  • Consume Riba
  • Give Riba
  • Record Riba-based transactions
  • Act as witnesses to Riba
He ﷺ stated:
"They are all equal in sin."
[Sahih Muslim, Hadith No. 1598/106]

Advice to Muslims:

Your true wealth is your lawful capital, and I advise you and all Muslims to completely avoid any involvement with Riba-based institutions and seek repentance for any past transactions.

Engaging in Riba transactions is equivalent to waging war against Allah and His Messenger, leading to divine punishment and severe consequences, as Allah ﷻ warns:

"Those who consume Riba will not stand except as one whom Satan has driven to madness by his touch. That is because they say: 'Trade is just like Riba,' whereas Allah has permitted trade and forbidden Riba."
[Surah Al-Baqarah: 275]

[Shaykh Ibn Baz: Majmoo’ al-Fatawa wal-Maqalat, 19/145]
 
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