Is stock market haram in islam | Share Market | Prize Bonds

Are you aware that the stock market is haram in Islam? What are the Islamic teachings about what can be done in the stock market business? What precautions should an ordinary Muslim take in this business? Let us try to understand it according to our information.

It is a common observation that such companies and schemes come to the fore every day, making people dream like this and falling prey to them while trying to make money quickly.

When they deposit their savings with the company, the company and its scheme disappear as if it never existed, and their clients keep shaking hands.

What is Share Market?

What is Share Market?

Business could be better on the stock exchange. It is a means of extorting money from people, so it is not permissible. If something was worth one lakh at night, how is it possible to have 1000 in the morning?

Money is distributed by enticing people. Money is collected. Money is raised through gambling and manipulation.

Shares are allowed to be traded on the stock exchange subject to certain conditions:

  • The company whose shares are being bought and sold exists outside the company, is not only registered on paper, nor are the company’s total assets in the form of cash, but also the static assets owned by the company.
  • The total or minimum capital of the company should be halal
  • The real business of the company should be legitimate; it should not involve the business of haraam things
  • In buying and selling of shares, all the conditions of buying and selling must be observed
  • The profits earned should be distributed among the total shareholders; some of the profits should not be reserved as a (precautionary) reserve.
  • Direct or indirect interest and gambling are avoided during the purchase and sale of shares. If these conditions are observed in the shares business, then this business is permissible; otherwise,
  • It is better to avoid this business, as it is tough to trade shares in the market with all these conditions. Therefore, avoidance is advised.

Is stock market haram in islam?

Is stock market haram in islam?

At the same time, it is essential to buy shares of only those banks or institutions that do business on Islamic principles. In this case, there is a possibility of both profit and loss.

If a company or bank conducts an interest-bearing business, investing in it and earning a fixed return is equivalent to eating interest, which is not permissible for a Muslim.

What is Prize Bonds in Islam?

What is Prize Bonds in Islam?

The government borrows money from the people to meet its various productive or non-productive needs. In some schemes, it provides fixed benefits.

Reward bonds are securities through which the government collects money from the people, uses the money for commercial and industrial purposes, and makes a profit to motivate the money givers.

Distribute some of the rest of the profits to the account holders by drawing lots and deducting the administrative expenses from the profits earned for the sake of consolation and encouragement of the account holders.

Some get it, some don’t, but real money is safe. However, it is disgusting that some account holders lose out on profits while others enjoy it. While all invest capital, since it is not a gamble or interest, it is permissible because of this defect.

If the government wishes, the profit earned after deducting expenses should be distributed among all the account holders at a proportional rate, and each shareholder should get their fair share.

“Earnings with one’s own hands” is indeed the best sustenance. Still, the sustenance obtained from other forms is also the best, such as the sharing portion of the inheritance, gifts, booty, etc., is also the best sustenance.

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