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['Aalim Network QR] Trading in bank shares

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|       In the Name of Allah, the Compassionate, the All-Merciful       |\
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Assalamu 'alaykum
The following question was answered by Shaykh Mustafa Jaffer.

Salaams & Duas
Ummulbanin Merali - Moderator - 'Aalim Network


1.A Mutual fund /Investment co.invests its money in  all kinds of shares &
has income from appreciation & dividend from shares. These investments may
be in banks / airlines(who serve liqour).
Individuals can invest in Mutual funds/Investment cos  instead of directly
investing in the share market.
Sometimes it is known that the mutual fund/ Invt co.  investment portfolio
contains bank shares (dividend from these shares may or may not be Income of
the fund as they could be sold before dividend date),sometimes the portfolio
is not known.
I understand from reliable sources that one can invest in Bank shares if
they are sold before the dividend date ie dividend from banks( whose income
in turn is mainly from interest) is not part of ones income ie one only
trades in these shares.& profits from the increase in its share price.
The mutual funds/Invt co share value is approx the sum total of  the value
of all the shares held by it.
Can one buy Investment co shares if it is certain that its income includes
dividend from banks, & if not known for sure but it has a high probability ?


Trading in Bank Shares is not haraam even though its main source of income
is interest. However, Banks have other sources of income other than
interest. All the Ulema are unanimous that if you do not exactly from which
part of the bank's income you have gained, then it is alright to assume
that it could have come from the non-interest income.

Mustafa Jaffer

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