By TCN News,
Mumbai: Ulema and clerics have given their nod, with some conditions, to investment in stock market, saying share trading is closer to Shariah than the present banking and insurance system. The Islamic Investment and Finance Board (IIFB), which has Maulana Wali Rahmani and Maulana Khalid Saifullah Rahmani as Members among others, have come up with Shariah standards for investment in stock market.
IIFB members met in Mumbai recently and discussed in details the share trading and investment in stock market in the light of Shariah. The meeting was attended by Maulana Wali Rahmani, Sajjada Nasheen, Khanqah Munger, Maulana Khalid Saifullah Rahmani, General Secretary, Islamic Fiqh Academy, Mufti Fuzailur Rahman Usmani, Mufti Shoaibullah Khan, Mufti Mohd Yahya Qasmi, Mufti Anwarul Haq Qasmi and Maulana Obaidullah Neyaz Qasmi.
Imtiaz Merchant and Dr. M. Y. Khan addressing the press
Giving details about the Shariah standards formulated by the Ulema and members of IIFB, Imtiaz Merchant, Founder of Pragmatic Wealth Management Pvt. Ltd., told media in Mumbai on 18th Jan. 2011 that the Ulema while admitting there are some unpleasant aspects of stock market in the eye of Shariah, they concluded it is closer to Shariah than banking and insurance industry.
IIFB, according to Imtiaz Merchant, felt purchase and sale of shares is the modern form of Shirkat which is allowed by Shariah, so compared to banking system and insurance system, share trading is closer to Shariah. With some conditions, therefore, investment in stock market can be done, though it can’t be said that even following the conditions, share trading will be completely Shariah compliant. But compared to other forms of investment, this is better and has less evils, said Merchant adding that as Muslims are not in position to run their own economic system, this can be adopted.
Imtiaz Merchant launching the website “islamitijara.com”
Shariah standards for investment in stock market
*The basic business of the company of which share is being purchased should be halal
*If the company has taken loan on interest then that loan should not be more than 33% of average market capitalization of 12 months.
*At the time of share purchasing, the liquidity fund of the company should not be more than 33% of average market capitalization of 12 months.
*If the company has debt then the debt should not be more than 33% of average market capitalization of 12 months.
*If the basic business of the company is halal but it is involved though partially in interest or any other prohibited business activity, then the income of the haram sources should not be more than 5% of the total income of the company.
At the press conference, the Urdu and English version of Islami Tijara magazine was launched. The Pragmatic Wealth Management Pvt. Ltd, which works under the guidance of IIFB, launched its website http://islamitijara.com/.
Islami Tijara Magazine launch in Mumbai
IIFB has four Members: Maulana Wali Rahmani, Sajjada Nasheen, Khanqah Munge; Maulana Khalid Saifullah Rahmani, General Secretary, Islamic Fiqh Academy; Mufti Shoaibullah Khan, and Imtiaz Merchant.
The press conference was addressed by Dr. M. Y. Khan, Retd senior Director RBI and Former Advisor to SEBI, and Imtiaz Merchant, Founder, Pragmatic Wealth Management Pvt. Ltd.