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Invest Money With SomeOne In Forex Trading Business Is Halal Or Haram..?

2012-07-17T03:12:00.001+05:00

Invest Money With SomeOne In Forex Trading Business Is Halal Or Haram..?

Answered By: Mufti Ikram ul Haq - Fatwa Center of America

Question:

Q: Suppose If i invest money with someone one for getting profit and profit or lost is also shared and profit or time period is not fixed and the man is also a owner of private forex trading company which i invest my money so is this halal or haram by islamic point of views. There is a lot of peoples who are investing a big amount with this man or company so please answer this question deply or explain this because there is a big issue or problem in our area the site of this company is http://akforex.com.pk and his name is Afzal Khaliq And He is also from pakistan.

Answer:

بسم الله الرحمن الرحيم

In the Name of Allah, Most Gracious, Most Merciful.

الجواب حامداومصليا

Online forex trade is not considered compliant with the rules of Islamic Shariah. Therefore, one should avoid doing business in online forex trade as well as investing in it.
"On the spot forex trade whereby two or more parties physically conduct a transaction of currency exchange is permissible and it is also permissible to invest it"
And Allah knows best.Mufti Ikram ul Haq
Fatwa Center of America

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Riba ( SOOD ) and the Increase of Wealth

2012-07-16T23:50:00.001+05:00

Riba and the Increase of Wealth

Answered By: Mufti Ikram ul Haq - Fatwa Center of America

Question:

Asalamu alaikum Mufti Sahib How do we explain to non-Muslims the concept that riba causes a decrease in wealth when, at least from the example of modern, riba-based societies, it appears to lead to a great increase in wealth? Jazakallahu khair

Answer:

بسم الله الرحمن الرحيم

In the Name of Allah, Most Gracious, Most Merciful.

الجواب حامداومصليا

The apparent increase from a Haram source of income such as Riba, robbery, theft etc... may appear to increase one's wealth but it carries no benefit in reality. Such wealth will prove to provide no benefit for the possessor and eventually it will collapse altogether.
In the most recent financial meltdown of Riba based economy, people has millions of dollars in their accounts received through interest and other Haram sources, which disappeared overnight.
Allah demolishes the interest and usury and increases the (benefit) of charities.
Those who end up taking a small percentage of interest as a result of their money being kept with a conventional financial institution ultimately pay more in other ways. For example, the bank lends the same money that it receives from its depositors and then earns and percentage of interest over that loan then it shares a small percentage of that interest with its depositors. However, the big borrower who borrowed money for manufacturing or for any other business includes the interest that he pays to the bank as the cost of his product. So, when a manufacturer makes a product, he also considers the amount of interest that he pays on the loan as his cost of production. Therefore, he takes it from the consumer by adding into the cost of manufacturing or product.
At the end of the day, an ordinary person who may have earned some interest on his money but in reality lost more money.
And Allah knows best.

Mufti Ikram ul Haq
Fatwa Center of America

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Islamic Forex Account Fitwa

2012-07-16T19:47:00.004+05:00

Islamic Forex Account

Answered By: Mufti Ikram ul Haq - Fatwa Center of America

Question:

Assalam-o-Alaikum I am familiar that opening an online forex account (Standard, Micro, Mini) is HARAM because it contain Riba, Interest. I read many fatwa's on this issue and I am satisfied with them. But I have not been able to get an answer for what I was looking for. Your reply to my question will help every Muslim investor. Nowadays, some brokers are providing Islamic Forex account for Muslim investors which they claim that these accounts comply with Shariah laws and do not accumulate interest or swap fees. Some common Islamic forex trading account conditions include: Swap Free Forex Account: In Forex trading, when traders leave positions open overnight, it is referred to as a rollover. This usually entails rollover fees, but when trading with a Forex Islamic account, these fees are waved. No Riba Policy: According to Islamic law, giving or taking interest on transactions is strictly forbidden. This of course presents a problem when dealing with banks or other financial institutions. With Forex Islamic accounts, all "Riba" charges are canceled. Musharaka or commonly called joint venture: This refers to a partnership or joint venture for a specific business with a profit motive, whereby the distribution of profits will be apportioned according to an agreed ratio. In the event of losses, both parties will share the losses on the basis of the agreed ratio also known for Islamic MT4 trading platform. Now my question is that: - Q: Can we trade in Islamic Forex Account as it contains no interest fee on them? Q: Can I do Istekhara for this to get a consent from Allah SubhanaoTallah?

Answer:

بسم الله الرحمن الرحيم

In the Name of Allah, Most Gracious,

Most Merciful.

الجواب حامداومصليا

In light of the information available on Tadawul Islamic Forex Accounts or TDFX, I have learned that this particular form of forex trade is free of Riba and any swap or roll over fees. The Fuqaha have considered forex trade to be part of Bai-ussarf which has some strick condition to be fulfilled unlike ordinary forms of trading.
Among the conditions of Islamic Forex Trading Account, there is one condition known by the name of "Hibah (Gift or Donation). According to the condition, "The Hibah refers to gifts awarded voluntarily in return for a loan given. Now this Hibah or gift giving if it is done solely voluntarily then it will be permissible but if there is kind of pressure placed on the donors to give the gift then it would not be permissible. Therefore, if the investors are not willing to give the gift, it would not permissible to force them to give or to pressure them into giving in anyway. Such gift that is given under pressure or force is not acceptable.
In my opinion if the Islamic forex account strictly follows the guidelines mentioned in the description which include no interest accumulation and no swap or roll over fees then it would be permissible for a Muslim to engage in this particular form of trading.
In my opinion, it is important to have this Islamic forex trading officially recognized by a body of Muslim scholars who known for their expertise in Islamic finance and there should be an active board of Shariah advisors to oversee the transaction of this company that offers these Shariah compliant services to its clients because without the proper oversight it is very easy to stray from the principals and guidelines of Islamic Shairah.
Therefore, I conclude that in light of the information available about the Islamic Forex Account, it is permissible to invest and trade in Islamic forex trading.
And Allah knows best.

Mufti Ikram ul Haq
Fatwa Center of America
9 Safar 1433/ January 3 2012
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