Category: the book of sales Transactions

Buying Shares of Banks and selling them is forbidden and it is Riba

Question :

What is the ruling on buying shares of banks and selling them after a period of time? This is by 1,000 becoming 3,000, for example. Is this considered Riba?

Answer:

It is not permissible to sell shares of banks or to buy them, as it is selling cash for cash without stipulating equiv- alency and actually receiving the money. This is also because the banks are Riba based institutions and it is not permissible to work with them in buying and selling. This is due to Allâh's Statement:
"And cooperate in righteousness and piety and do not cooperate in sin and transgression."

This is also due to what is confirmed from the Prophet that he cursed whoever devours Riba, whoever gives it, whoever writes it and those who witness it. He said:
"They are all equal (in sin)."

This was recorded by Imam Muslim in his Sahih.

You do not get anything other than your principal amount of money and my advice to you and to others beside you among the Muslims is to avoid all Riba transactions, warn against them and to repent to Allâh from what you might have done of that in the past. This is because the Riba transactions are an attempt to wage war with Allâh and His Messenger and they are from the causes of Allâh's anger and punishment.
This is as Allâh said:
"Those who devour Riba will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytan (Satan), leading him to insanity. That is because they say, 'Selling is only like Riba,' whereas Allâh has permitted selling and forbidden Riba. So, whoever receives an admonition from his Lord and stops eating Riba, shall not be punished for the past; his case is for Allâh (to judge); but whoever returns (to Riba), such are the dwellers of the Fire - they will abide therein. Allâh will destroy Riba and will give increase to Sadaqat (deeds of charity, alms), and Allâh does not like the every disbelieving sinner."

And He said:
"O you who believe! Fear Allâh and give up what remains (due to you) from Riba (from now onward), if you are (really) believers. And if you do not do it, then take a notice of war from Allâh and His Messenger. But if you repent, you shall have your capital sums. You do not deal unjustly (by asking for more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums)." This is also based upon what preceded in the noble Hadith.