Is the method of Islamic banks in granting cash loans to borrowers by purchasing shares from the stock market and then selling them considered permissible (halal)? And what questions should be directed to the bank to ascertain the Sharia compliance of these transactions?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
Purchasing shares through a bank presents two possibilities: Either the bank lends the customer the value of the shares with interest, which is prohibited usury (riba). Or, the bank purchases the shares for itself and then sells them to the customer through a Murabaha sale. In this case, the bank must acquire ownership of the shares before selling them to the customer, and the contract must not include a late payment penalty. A person's sale of these shares after acquiring ownership, with the aim of obtaining money at a lower price, is known as Tawarruq.
Summarized from the full answer at Ftawy · imported
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