Shares, Unit Trusts and the Shariah – Part Two


In its endeavour to legalize trading with and investing in riba  companies, Albaraka Bank states:

“What is inescapable is tolerable’ – The advocates that argue  for permissibility substantiate it by quoting Al Bahooti’s  statement, which says: ‘What cannot be drained, like the sewers  of Makkah, does not become impure by urine, or by anything  else, until its colour or look is changed.” 

The principle, ‘What is inescapable is tolerable’, is baselessly  employed in the endeavour to legalize riba and haraam wealth.  The analogy with the sewers of Makkah is absolutely ridiculous  and fallacious. The sewer waters will always be impure whether  urine enters it or not, because the colour, look and taste of such  waters are always changed by an abundance of impurities. Sewer  water is never pure. The discussion refers to clean rain water  flowing in street gutters or canals, etc., not to filthy sewer water  which does not require a further addition of urine to render it  impure. Its impurity is a confirmed fact. The filth (najaasat) in  sewer waters is always conspicuous. Yet, inspite of the  aforementioned principle, the ruling of impurity will necessarily  apply on account of the transformation of the properties and  attributes of the water. The ‘tolerability’ of the initially pure  water having become impure water is conditioned with ‘colour  and look’. It is not unrestricted.

Furthermore, the stupidity of the analogy is self-evident. What is  the relationship between sewer water and indulgence in riba- trading? What makes investment in haraam stock companies  ‘inescapable’? What suffering does abstention from involvement  with riba companies create? If the only well in a village has been  rendered impure and there is no way of purifying it, the  argument of ‘inescapability’ has validity. If no other water is  available, the use of the impure water of the solitary well  becomes tolerable in the same way as haraam meat becomes  tolerable to save life when absolutely no halaal food is available.  But what is the life-demanding need to become involved in  trading and investment with ribat enterprises? The claim of  ‘inescapability’ in relation to riba investment is a figment of the  imagination of the capitalists of these banks.

The vast majority of Muslims throughout the world do not invest  in these riba companies listed on the stock exchange. None of  them suffer in consequence of non-participation in these  companies. Only a tiny minority, namely, the extremely wealthy  members of the community, especially the capitalist-minded,  invest in riba companies and haraam businesses. Riba and  haraam cannever be legalized on any principle of the Shariah for  further bloating the pockets and filling the coffers of millionaires  and billionaires—of people who are really in no need of the illgotten  money which their haraam investments will generate.

Another utterly baseless analogy to legalize indulgence in riba, is  Albaraka Bank’s citation from the Al-Majmoo’ of Imaam  Nawawi (rahmatullah alayh):

“A sale wherein the uncertainty is unavoidable is  lawful although it might involve some degree of  Gharar. An example of a sale of Gharar where the  uncertainty is unavoidable relates to disclosing the  strength of the foundation of a house purchased.”

What is the similarity between the inability to disclose the  strength of the foundations of a house and indulgence with the  haraam stock companies to earn haraam income? This analogy is  fallacious and can never be accepted as a basis for permissibility  to invest in riba companies. What makes such investment  incumbent or absolutely necessary to justify dealing with  companies which deal in riba? Purchasing a building without  disclosing the strength of the foundations, is not a haraam act.  But riba is absolutely haraam. Disclosing the strength of the  foundations is normally impossible. This type of uncertainty  does not exist in kuffaar companies dealing in riba and other  haraam and baatil transactions.


The Unit Trust brochure states:

The advocates of permissibility who participate in  these stocks acknowledge that usury is unlawful,  whether in the form of stocks or otherwise. But the sale  and purchase of equities is (are?) lawful because the  business activities of these companies are primarily  lawful and the unlawful part generated from an illgotten  income as a result of usury can be purged, set  aside and spent for charity and public interest.” 

It is haraam to participate in any business knowing that it  generates haraam income regardless of the “business activities  being primarily lawful”. The argument of purging haraam wealth  by giving it to charity is baseless, in fact, unlawful. Haraam  wealth which has by some misfortune come into one’s  possession has to be compulsorily eliminated by giving it to  charity. Such purgation is not a licence for participation in  ventures to earn halaal and haraam wealth with the intention of  giving the haraam part to charity. Participation remains haraam.

Participation in even a business in which the activities are 100%  lawful can also be haraam if the trade transactions and contracts  of a business are baatil and faasid. Even if the only products  sold are Zam Zam Water and Mushafs (Qur’aan copies), then  too will it be haraam to participate in such a venture. The  argument of the business activities being primarily lawful is not  valid.

If the agreement on the basis of which the investor acquires  gain/profit is in conflict with the Shariah, such yield will be  haraam. Notwithstanding the 100% halaal nature of the actual  business activity, e.g. the products sold are only halaal foodstuff.  However, according to the partnership agreement, Zaid who is a  partner receives a fixed monthly sum of money for his capital  investment. This gain acquired by Zaid is riba and is haraam  notwithstanding the 100% lawful business activities of the  business.

In the same way, the gain acquired from investment in equities is  riba and not lawful due to the unlawfulness of equities. Since  dealing in shares in public companies is not valid, hence haraam,  the yield is haraam riba. The gain of this type of investment will  not be halaal simply because the trading activities or the  products sold by the company happen to be halaal. A massive  deception perpetrated by the Muslim capitalists is to present the  smokescreen of lawful products in which the companies deal.  The public is misled and made to believe that purchase of shares  in certain joint stock companies is lawful because they do not  deal in liquor and pork. This is not the only criterion for  lawfulness in the Shariah. In addition to the products being  halaal, the agreement/contract on the basis of which profit is  earned must also be lawful. But shares and equities are not  lawful, hence the dividend yielded is also not lawful.


The capitalist Bank setting itself up as a grand mufti issues the  following verdict:

The opinion of those who argue for permissibility is  closer to the truth in this respect, for the following  reasons:” 

Among the reasons for its opinion, the capitalist bank tenders the  following: “The strength of the sources they have cited from  jurisprudence provisions and legal principles.” 

Let the capitalist Bank furnish the sources of ‘jurisprudence’  which the legalizers of riba have provided for their view so that  their strength and validity could be scrutinized. This arbitrary  claim is baseless. What are these sources? We have just shown  that the ‘legal principles’ cited by Albaraka Bank, have no  application in the determination of permissibility in relation to  the shares and equities. The principles have been  mismanipulated and an abortive attempt has been made to apply  these ‘maxims’ to legalize what the strongest Sources declare  absolutely Haraam. The strongest Sources are the Qur’aan,  Ahaadith and Ijma’ of the Ummah.

Far from Islamic jurisprudence (Fiqh) legalizing the haraam  dealings of the stock exchange, it rather confirms the hurmat  (unlawfulness and prohibition) of the capitalist systems and  relegates the trade in shares and equities into the domain of  butlaan (being baatil and haraam).

The second reason tendered by Albaraka Bank for the  permissibility view is: “The backtracking of some advocates of  impermissibility and their coming closer to arguing for  permissibility, (27-29 Muharram 1419 A.H.)”

The alleged “backtracking of some advocates of  impermissibility” does not bolster the view of permissibility.  Firstly, this claim is highly ambiguous. The reasons for the  alleged “backtracking” are mysterious. The backtrackers have  not been mentioned. Their arguments are unknown. Their  “backtracking” has absolutely no bearing on the arguments of  impermissibility. The arguments should be clinically dispensed  of by providing solid Shar’i grounds for such dismissal.  Furthermore, the views of contemporary liberals really do not  hold much weight in the Shariah. Generally, their opinions are  heavily influenced by the inordinate demand of the Muslim  capitalists to make halaal just every haraam concept spawned by  western capitalism.

The arguments of the ‘backtrackers’ are just as baseless as the  arguments of the advocates of permissibility—arguments devoid  of Shar’i substance –arguments which stretch Shar’i principles  beyond the confines of their operation –arguments which employ  Shar’i principles to cancel out Qur’aanic and Sunnah  prohibitions.  The third reason offered by Albaraka Bank for its acceptance of  the permissibility view is:

“This would serve in the common  interest of the Ummah in the vital economics field of conducting  business.” 

Should it be accepted that the permissibility view “would serve  in the common interests of the Ummah”, then it will be like  saying that haraam food would serve in the common interests of  the Ummah in the vital field of nourishment and sustainment of  life especially in the poverty stricken regions of the world. The  fallacy of this type of reasoning should be manifest. Then the  claim that the particular dealings of the bankers, such as leasing  and selling luxury items to wealthy persons and to the not so wealthy, but generally to people living comfortably and desirous  of luxuries beyond their means, are within the ambit of ‘vital’  needs, is blatantly false. It is a naked lie which deceives only the  bankers themselves. The masses of the Ummah are not in the  least reliant for their living on the facilities of the riba-capitalist  Muslim banks such as Albaraka Bank. Their Rizq is Allah’s  Responsibility, and He provides such Rizq without there being  any need whatsoever for indulgence in riba and haraam.

The “common interests of the Ummah” have to be served by  means of halaal, not haraam. Riba cannot be a way for serving  the “common interests of the Ummah”. The Qur’aan  categorically declares: “Allah increases Sadqah (i.e barkat and  the quantity of wealth), and He eliminates riba (i.e. He destroys  wealth of riba).” The “common interests of the Ummah” cannot  be lawfully and constructively served by the endeavour to  legalize riba by means of baseless interpretations of maxims and  principles totally unrelated and inapplicable to this issue.

The averment that the field of operation of the capitalist bankers  is “the vital economics field of conducting business” is true in  relation to only the banks such as Albaraka. The economics of  the capitalist Muslim bankers are not ‘vital economics’ for the  masses of the Ummah. The masses hardly have any connection  with these banks. Furthermore, these riba-banks driven to  madness by the touch of shaitaan DO NOT serve the needs of  the Ummah at large. It is not their policy to be of any assistance  whatsoever to needy Muslims and to the masses of Muslims.  The mechanics of their trade is vociferous testification for the  wide chasm which exists between the Muslim banks and the  Muslim masses. It is more difficult to do a deal with a bank like  Albaraka for example, than with a non-Muslim bank such as  Westbank. The requirements for passing the applicant’s creditworthiness are more cumbersome and greater in quantity  than the requirements stipulated by the non-Muslim banks.

To grant credit on which riba will be charged, the Muslim ribabank  requires, for example, 6 months of bank statements and  financial statements (balance sheets, etc.) while the non-Muslim  bank does not require this much of information. The very modus  operandi of the Muslim bank confirms that only a very small  group of well-to-do people can benefit from the riba-loans it  advances. Let no one be under any misapprehension in this  regard. The Muslim bank does not buy and sell anything. It  does not purchase a vehicle. It does not own a vehicle to resell at  a profit. Its claim of a muraabaha sale is a massive deception,  fraud and falsehood designed to hoodwink unwary Muslims. The  Muslim capitalist bank does only one shaitaani act –it advances a  loan on interest. It then seeks to cover its haraam tracks with  names such as muraabahah, etc.

But the veneer of the Shar’i hue  with which it has painted its transactions are too thin to conceal  the reality of the misdeeds being perpetrated in the name of  Islam and under the aegis of signatures of Muftis who have  likewise been misled and constrained to issue fatwas of  legalization. From beginning to end, it is only Riba which  regulates all the transactions of the capitalist Muslim banks.

The fourth reason Albaraka Bank advances for the permissibility  to trade in haraam shares is:

“The permissibility has opened a wide scope for Islamic  banking world wide, and this is presently being a form of  Da’wah of the message of Almighty Allah.” 

Indeed Albarakah Bank has descended into the depths of moral  decadence by dragging the glorious Name of Allah Azza Jala  and the sacred institution of Da’wah and Tableegh into its sordid  mess of haraam riba dealings. Men of these banks who have no respect for the Ahkaam and institutions of the Deen dare speak  of Allah Ta’ala and Da’wah.

You phone the bank to transact a  deal and you have to commence with zina. The first thing that  happens is to hear a female whispering into your ear. They speak  of Da’wah and Allah Ta’ala while they flagrantly disregard  Allah’s Hijaab laws. The muftis who support these evil banks  lack the very basic Islamic decency and shame when dealing  with these miscreants. They refrain from vital and fardh  naseehat. They will not admonish the modernist capitalists in  issues of moral turpitude which are flagrantly perpetrated. These  muftis sit together with the females, savouring their eyes,  tongues and ears, with the looks and voices of the females whom  the Muslim entrepreneurs employ in attempts to seduce  customers and the bosses in exactly the same ways as their  kuffaar counterparts do. The mufti saahibaan should hang their  heads in shame.

Just what Da’wah stems from the riba deals of the banks? The  Message of Allah declares that riba is haraam. But the shaitaani  ‘da’wah’ transactions of the banks are contaminated with riba.  This argument of Albaraka Bank is like a person priding himself  with having made wudhu with urine. There is absolutely not  even a semblance of rationality in this ludicrous averment which  a brain driven to insanity by shaitaan’s touch has advanced as a  reason for legalizing riba on the fallacious basis of  mismanipulation of Shar’i principles and ‘maxims’. What a  stupid reason for an attempt to legalize haraam!

The fifth corrupt reason tendered by Albaraka Bank for the view  of permissibility of the modernist muftis and sheikhs is:

“This is  instrumental in providing Islamic banks with an alternative for  short term investments.”

Firstly, Albaraka Bank and other banks of its ilk are not  ‘Islamic’ by any stretch of imagination in the same way that a  tatter shall or bottle store owned by a Muslim cannot be  ‘Islamic’. Muslim ownership does not necessarily make an  institution Islamic. If legalization of riba and haraam will  provide an alternative for short term investment, it is not a  ground for permissibility of what Allah has made impermissible.  The Shariah does not issue a licence for legalization of haraam  and riba to satisfy the need of the banks for short term  investment.

The five ‘reasons’ presented by Albaraka Bank for its preference  of the view of permissibility are all utterly baseless. These  ‘reasons’ are devoid of Shar’i substance and are not at all  grounds for making a choice between two opposite views –  between halaal and haraam. Such a choice can be made by only  properly qualified Ulama on the basis of Shar’i dalaail, not the  type of stupid and insipid arguments motivated by the percuniary  interests of the bankers whose prime concern is only to make  money by hook or crook in ways which may be even haraam.


In a truly ridiculous averment, Albaraka Bank states:

“The Fatawa of Albaraka’s 6th Islamic Economic Seminar  (6/5) on purchase of equities in Joint Stock Companies  with lawful objectives but which occasionally deal with  usury by way of extending, or seeking loans. The opinion  of the participating fuqaha (sic!) appears to be in favour  of purchasing such stocks.” 

Our advice to Albaraka Bank is to revert to Hadhrat Mufti Taqi  Saheb to ask him for the meaning of the term ‘fuqaha’. Albaraka  is blissfully ignorant of the meaning of Fuqaha. The participants  of the ‘economic seminar’ of Albaraka Bank are not Fuqaha. Albaraka Bank does no possess even an idea of the meaning of  Fuqaha. The age of the Fuqaha has terminated a thousand years  ago.

Inspite of the participation of the assumed ‘fuqaha’ in a seminar  organized for Albaraka Bank’s pecuniary aims, Albaraka still  has no clear direction, hence it is constrained to say “appear to  be in favour of purchasing such stocks” — haraam stocks!  Despite the participation of a galaxy of modernist ‘fuqaha’, no  clear direction—no categoric ‘fatwa’ was forthcoming, hence the  bank is constrained to proclaim the permissibility view with  misgiving and uncertainty.

A disease of the nafs from which all modernists suffer  chronically is to rush into the skirts of taqleed of liberal sheikhs  when the ‘fatwas’ appear palatable and serve the desired  interests. Hence, the modernist capitalists of Albaraka Bank are  quick to cite ‘fatwas’ of sheikhs in its attempt to bolster its riba  dealings. Feeling snug with such fatwas, the Bank states:

The said memorandum permits investment in these equities. The  Shariah boards of the following (5 riba-capitalist banks)  adopted the view of those who argue for permissibility.”

Firstly, the so-called ‘shariah boards’ of the riba-banks have no  Shar’i credibility. The members of these boards have worldly  interests with these banks, hence they will sit together in settings  and scenarios which advocate even zina of varying degrees.  Secondly, the adoption of the banks of the view of permissibility  is simply a natural choice of those whose job it is to manufacture  money by legalizing the prohibitions of Allah Ta’ala. Thirdly, let  it be known that the baatil fatwas of the liberal sheikhs and  muftis hold no water in the Shariah. In this regard, this Ummah  is constrained to heed the following warning of the Qur’aan in  its castigation of the Ulama of Bani Israaeel:

“They take their Ahbaar and their Ruhbaan as  gods besides Allah.” 

It was the accursed practice of the sheikhs and muftis of Bani  Israaeel to do what the modernist and liberal sheikhs and muftis  of our age are doing. They legalized haraam to gain the favour of  the wealthy capitalists and to gain worldly contributions for their  pet projects and for themselves from those whose desires they  upheld with their corrupt fatwas. These liberal learned men have  opened up a miserable avenue of baatil ta’weel (false  interpretation) to gain the favour of the wealthy capitalists.  Hadhrat Haaji Imdaadullah (rahmatullah alayh) speaking on the  subject of this type of interpretation said: “They have opened up  such a wide portal of interpretation through which several  elephants can pass together.” So wide and terrible is this  doorway of baatil ta’weel initiated by the liberal muftis and  shaikhs that a number of ‘elephants’ can go through all at once,  not in single file.


About its ‘shariah’ board, Albaraka Bank states:

“It is made up  of a team of Islamic legal scholars…………the boards role is to  ensure that the fund is in compliance with the letter and the  spirit of Islamic investing.” 

Neither do Albaraka’s business activities comply with the letter  nor with the spirit of Islam. On the contrary, the entire operation  of the Bank is in compliance with the letter and spirit of the  kuffaar capitalist economic system as is quite apparent from the  methodology it has adopted when granting credit facilities to  clients, and when it claims payment from clients who may have  become involved in financial difficulties. There is absolutely no difference between these Muslim-owned banks and the non-  Muslim banks in all their activities.

What brand of “Islamic legal scholars” does Albaraka Bank have  in its employ? The obligatory duty of Islamic scholars is to  uphold the Institution of Amr Bil Ma’roof Nahy Anil Munkar  (Commanding righteous and prohibiting evil) in every sphere of  the Deen, not only in the financial department. The moral  (Akhlaaqi) sphere is a vital component of the Shariah. Instead of  admonishing the modernist owners of the bank and applying  pressure on them to refrain from employing female staff—a  purely lewd practice of the kuffaar—the molvis who constitute  the bank’s so-called shariah supervisory board, participate in  haraam acts along with the modernist capitalists of the bank.

These molvis cannot honestly plead ignorance for their  condonation of the practice of female employees and  receptionists at the bank. Surely they must be aware of the  famous Hadith in which Rasulullah (sallallahu alayhi wasallam)  stated with great clarity that the various organs of the body  commit zina. Thus, the ears, the eyes, the hands, the heart, etc.,  all commit zina when they become involved with females for  whom observance of Hijaab is imperative—Waajib. Yet they  freely intermingle and interact with the female staff, no purdah  whatsoever being observed.

Every client has to suffer the spiritual and moral calamity of  having to speak with female receptionists. Muslim clients of  these banks have complained to us in this regard and have  voiced surprise, not because of the employment of female staff  by the modernist fussaaq bank owners, but by the flagrant  approval for this practice offered to the bank by the molvis – by  the so-called “Islamic legal scholars” of the so-called “Shariah  Supervisory Board”. They have truly abdicated their office of molwiyyat and have assumed the despicable role of the ulama-soo’  of Bani Israaeel of bygone times.

When learned people – “Islamic legal scholars” – show  absolutely no regard for the Qur’aanic commands of Hijaab,  what confidence can anyone repose on them in matters of  monetary concern, especially when they constitute cogs in the  riba enterprise of the Muslim capitalists?

When Hadhrat Umar (radhiyallahu anhu) was on his way to take  possession of the City of Jerusalem, he halted at a place called  Jabiyyah. In an address to the Sahaabah and other Muslims who  had assembled to welcome the illustrious Khalifah, Hadhrat  Umar (radhiyallahu anhu) said:

“O People! Reform your souls (your characters),  then your outward actions will become  (automatically) reformed……Practise for your  Aakhirah, and your mundane affairs will be seen  to……….Never ever be alone with a woman, for  verily, the third one present is shaitaan.” 

Sayyiduna Umar Ibn Khattaab (radhiyallahu anhu), the Second  Khalifah and Ruler of the Islamic Empire was on his way to take  political possession of an important prize city and to annex it to  the Islamic Empire. Yet, his address to the Sahaabah and the  Mujaahideen emphasised the moral aspects of the Deen, among  which he singled out for mention the strict observance of purdah  and to scrupulously avoid being together with females. The  illustrious Khalifah did not fail in his duty of Amr Bil Ma’roof.  His political preoccupations and the responsibility of the  Khilaafate did not make him indifferent to the morality of the  Ummah.

But the molvis of the bank’s ‘shariah board’ in their  air-conditioned offices with hardly any work to do, cannot find  the time nor the enthusiasm to admonish their paymasters who indulge in acts of moral turpitude – total and flagrant violation of  the Qur’aan’s Hijaab Ahkaam. 

Muslims cannot place any reliance on a board of so-called  “Islamic legal scholars” who show scant regard for the ahkaam  of the Shariah which they pretend to expound. Their prime  function is to search the kutub of the different Math-habs to dig  out some detail on the basis of which impermissible acts could  be made permissible to gain the favour of their capitalist bosses.

They have no other function but to formulate legless ‘proofs’ by  the method of baatil ta’weel to render halaal the haraam  activities of the capitalist bank operators These boards of  ‘Islamic legal scholars’ are not viable Shar’i institutions. They  are the handmaids of the entrepreneurs to aid them in the  achievement of their monetary goals. And, the prime method of  these boards is to fabricate only such fatwas which render  haraam into halaal.


The modernists and pro-western capitalists in the Muslim  community are always at pains to convince Muslims that the  joint stock company is exactly like a Shar’i Shirkat  (Partnership). Inspite of their strivings to prove their point and  the employment of baseless interpretation, they have failed in  their exercise. The simple reason for their failure is that the joint  stock company is plainly not a Shar’i partnership.

Albaraka Bank has been constrained to concede this reality,  albeit grudgingly. In order to justify investment in such ventures,  Albaraka’s brochure states:

“Shariah scholars mentioned that the joint stock company is  basically different from a simple partnership. In a partnership  contract the actions and dealings of each partner is (are)  attributed to each other by way of agency. But in the joint stock company the majority rules, therefore the majorities (majority’s)  choice cannot be attributed to the individual’s disapproval  (approval!).” 

This statement is a candid admission of the claim that joint stock  companies are not valid partnership enterprises in terms of the  Shariah. Since the joint stock company is basically different  from a simple Shar’i partnership, then what exactly is a ‘joint  stock company’ in terms of the Shariah? In which category of  dealings does the company fit? It is basically different from  Islamic Shirkat, hence it is never a valid Shar’i partnership.

Albaraka Bank has been constrained into this admission in its  attempt to justify investment in joint stock companies which  invest in interest bearing accounts to earn riba. The bank then  presents its understanding of ‘legal maxims’ to achieve the trick  of transforming haraam money into halaal. But, it is haraam for  the Muslim Bank to invest in such businesses in the first place.  The “legal maxim” which states the transformation, is entirely  another issue as has been explained earlier in this booklet. That  principle does not legalize participation or investment in any riba  institution to earn contaminated money.

The legal principle applies in a different situation. It is not a  licence for investing in a riba business. This has already been  explained in detail.


The evil gymnastics with ta’weel-e-baatil has culminated in a  shameless acceptance of haraam. Albaraka Bank states in its  brochure:

The percentage of non-halaal income in the income  statement must not exceed 10%. Income from interest bearing  accounts and non-halaal investments in total divided by total income (mark the gymnastics!) must not exceed 10% If the  (haraam) income exceeds 10% then such an investment will not  be permissible. The purification process must be adhered to if  the fund earned 10% or less of income from non-halaal  activities.” 

From whence did Albaraka Bank acquire the 10% limit? Has  Albaraka become the divine lawmaker?

The logic displayed by the Bank here creates the notion that to  invest in a haraam venture is permissible provided that the  haraam income does not exceed 10% of the total income of the  investor. The implication, in fact categoric claim, of this  statement is that it is permissible to invest in a haraam business  and earn haraam riba income as long as the haraam income is  10% or less in relation to the halaal income acquired from the  other investments.

There is no basis for this conclusion in the Shariah. It is  downright stupid and false to aver that if the percentage of  haraam income does not exceed 10%, then such investment is  lawful and if it exceeds 10%, it is unlawful. From where did they  obtain this ludicrous ‘fatwa’?

It is haraam to invest in an institution which pays haraam returns  regardless of the percentage relationship which such haraam riba  has with other halaal income. Truly, this type of logic and  conclusion are the effects of brains deranged by the touch of  shaitaan as the Qur’aan Majeed states.

Pursuing this corrupt and utterly baseless line of reasoning,  Albaraka Bank avers

The non-halaal investments must not  exceed 30% of the company’s total market capitalization.” ………The ratio of 30% is prescribed due the fact that it is less  than 1/3, and 1/3 has been declared abundant in the Hadith of  our beloved Muhammad (S.A.W.). (Bukhari & Muslim).” 

The bank dithers between 10% and 30%. The ‘ijtihad’ of the  bank has failed to present a uniform principle to regulate its  investments to earn haraam riba. In one instance 10% haraam  earnings render the investment unlawful, while in other instances  it is one third. This confusion is the consequence of the type of  satanic insanity which according to the Qur’aan Majeed applies  to those who indulge in riba.

This is truly rotten ‘ijtihad’ of the juhala (ignoramuses).  Albaraka Bank or its decrepit and incompetent ‘shariah  supervisory board’ consisting of so-called ‘Islamic legal  scholars’, has attempted to formulate a new principle of Fiqh  based on a Hadith which has absolutely no relevance to either  the issue of legalizing haraam nor to the formulation of a  principle. This silly ‘ijtihad’ of unqualified men has proposed a  new ‘principle’ which has not existed in Islam for the past  fourteen centuries. In its stupid ‘principle’ Albaraka Bank avers  that it is permissible to earn haraam income as long as the  unlawful earnings are less than one third of the total of one’s  halaal income. The basis for this new fangled ‘principle’ in  Albaraka’s opinion is a Hadith in which it is mentioned that one  third is much or abundant.

The Hadith to which Albaraka Bank refers pertains to the issue  of inheritance. A Sahaabi had asked Rasulullah (sallallahu alayhi  wasallam) if he should bequeath two thirds of his wealth to  Sadqah. Rasulullah (sallallahu alayhi wasallam) refused  permission for this and advised one third, adding that one third is  much.

This Hadith has no relationship with haraam earnings. Not a  single among the Fuqaha since the inception of Islam had ever  utilized this Hadith or any other Hadith to formulate the  principle which Albaraka’s corrupt ‘ijtihad’ has produced. There  is no principle in the Shariah which allows the earning of haraam  money on the basis of it being less than one third or more  precisely 30% (according to the tin-plated modernist mujtahids),  of the total of one’s halaal earnings.

The 30% ‘principle’ is a fraud fabricated in the name of  Rasulullah (sallallahu alayhi wasallam) by the ignorant  modernist ‘mujtahids’. About such falsehood, Rasulullah  (sallallahu alayhi wasallam) said: “He who alleges falsehood on  me, should prepare his abode in the Fire.” 

In the Hadith in question, Rasulullah (sallallahu alayhi  wasallam) mentioned that for the purpose of making a bequest to  charity, the testator should not exceed one third of his total  wealth since one third was much and adequate. The rationale for  this decision was clearly mentioned by Nabi-e-Kareem  (sallallahu alayhi wasallam). In ordering the Sahaabi not to  exceed one third, Rasulullah (sallallahu alayhi wasallam) said:  “It is better that you leave your heirs wealthy than in a state of  poverty which will constrain them to beg from people.”

It is the height of ignorance and shaitaan-induced insanity  (Qur’aanic epithet) to infer from this Hadith permission to earn  haraam wealth as long as it is 30% of the halaal wealth which is  earned elsewhere. The Hadith has been ludicrously used to  override the Qur’aanic and Hadith prohibition of riba in  particular, and haraam earnings in general.

This stupid ‘principle’ effectively means that a Muslim is  allowed to gamble, indulge in riba and other haraam business activities to earn haraam money as long as the ration of 30% is  observed. The brains which have spawned this haraam principle  are truly lamentable. The bank should present substantiation  from the Fuqaha and the Books of the Shariah for its ‘principle’  which it has clearly sucked out from its thumb.

If the 30% claim is a Shar’i principle, it should have uniform  application in all Shar’i issues. Consider the example of a  mixture of gold and a base metal. According to the Shariah if the  alloy consists of 49% base metal and 51% gold, the whole alloy  (100%), will be regarded as gold, and Zakaat has to be paid on it.  If the one third ‘principle’ of abundance has to be accepted, it  will follow that the whole alloy should be regarded as a base  metal exempted from Zakaat. But the Shariah does not employ  any such ‘principle’ to decide the nature of the mixture of  metals. The principle of predominance is employed. Since gold  is the dominant component of the mixture, the whole is regarded  as gold. Here one third is not considered to be ‘abundant’, hence  the alloy is not classified as gold inspite of 49% being gold- far  in excess of one third.


The Shar’i principle governing the transformation of haraam  money (not haraam employment or haraam investment or  haraam business), is known as Istihlaak which states that if  tangible haraam money is mixed with tangible halaal money, and  the halaal amount is predominant, more than 50% – the principle  mentioned above – then the homologous whole will be regarded  to be halaal. But at the same time it remains incumbent to purify  the money by giving to charity the haraam amount. Since the  coins have become indistinguishable due to the admixture, any  coins to the amount of the haraam sum, may be given away to  secure release from the obligation.

There is no one third principle operating here or in any other  transaction to render haraam lawful. The one third mentioned in  the Hadith is a straightforward mas’alah pertaining to the issue  of making a bequest for the time after Maut. It has never been  utilized to formulate a principle. Leave alone a principle for  legalizing haraam activity.


It would have been more appropriate for Albaraka’s artificial  ‘mujtahids’ to have formulated a principle on the basis of the  Hadith which states that Salaat performed with a garment  purchased with nine tenths halaal money and one tenth haraam  money is unacceptable to Allah Ta’ala. In this Hadith one tenth  (not one third) is sufficient to contaminate the whole.

According to the methodology of Albaraka’s ‘ijtihad’, the  principle which is deducted from this Hadith states: One tenth  haraam renders the whole haraam. Hence, 100% of Albaraka  Bank’s income is ‘haraam’ on the basis of this ‘principle’ which  can be formulated on the basis of the aforementioned Hadith in  terms of the logic of the ‘ijtihad’ of the riba-capitalists.

It can be correctly observed that morally all the income of the  Bank is contaminated since the haraam component of the total  wealth far exceeds 10%. The bank advocates a maximum of  30% halaal for the overall lawfulness of its income.

It should be understood that the one tenth mentioned in the  Hadith is not a mandatory minimum requisite for rendering the  whole contaminated. Even less than one tenth haraam will  likewise contaminate the whole in the same way as one drop of  urine contaminates a full bucket of water. Ill-gotten earnings are haraam regardless of the small quantity. The mention of one  tenth in the Hadith does not imply that one twentieth or 5% riba  is halaal.


A grave misconception of the ‘mujtahids’ of Albaraka’s ‘shariah  board’ is their understanding that the principle of Istihlaak of  tangible money—the coins and the notes—by admixture, can be  extended to haraam investment or earning haraam money. This  misconception has constrained Albaraka Bank to advocate  shamelessly participation in haraam business ventures, and to  invest in businesses to earn riba. This attitude attempts to create  the perception that the Shariah permits and give a free licence  for making investments in haraam ventures and to earn riba as  long as the amount is small in relation to the total income. But  this is totally and blatantly false.


The following glaringly haraam transaction more than  adequately highlights the riba backbone of Albaraka Bank and  similar other banks which lay vociferous claim to being models  of ‘Islamic’ banking.

A client applied for financial assistance to Albaraka Bank for the  purchase of a fixed property. Responding to Zaid’s application,  Albaraka Bank wrote:

“We have pleasure in confirming that this Bank has  approved a Murabaha (sic) facility of ONE MILLION  FOUR HUNDRED AND THIRTY FOUR THOUSAND  RANDS (R1,434,000.00) to assist you with the purchase  of the property referred to in your application.” Normally, in a Murabah transaction the Bank would  purchase the property from the registered owner at a  certain price and then resell it to you at a profit.  However, whilst we are satisfied that this Murabah  facility is in conformity with the Shariah, in view of the  practical difficulties involved and the substantial  additional costs due to the applicability of the laws of the  Republic of South Africa, we confirm that you may  conclude arrangements with the registered owner and  sign any documents necessary for the transfer of the  property directly into your name. 

The terms and conditions of the facility are as follows:  AMOUNT OF FACILITY  Cost R760,000.00  ABL Profit R674,000.00  Selling Price R1,434,000.00” 


In a brazen attempt to fool itself and to soothe the client who at  the time was desperately in need of the finance to purchase the  property, Albaraka Bank, set up the abovementioned stratagem  which it deceptively labels ‘Murabaha Facility’. 

Apart from the Hindu money-lenders of India who gobble up the  lands of poor unfortunate, ignorant Muslim peasants who happen  to suffer the colossal calamity of becoming entwined in the riba  tentacles of these monsters, we know of no other bodies, private  persons or financial institutions, which charge the whopping sum  of almost 100% interest on a loan. In the case under scrutiny,  Albaraka Bank charged the client R674,000 (Six hundred and  seventy four thousand rands) riba on a loan of R760,000 (Seven hundred and sixty thousand rands). No amount of desperate  wriggling and manoeuvring will be able to save the soul of this  riba institution from the charge that it is guilty of being the  institution which charges the highest usury in the world – riba  marketed under the label of ‘Murabah Facility’. By which  device of interpretation has Albaraka Bank legalized this huge  sum of riba, is known to Allah Ta’ala Alone.

The transaction never was a Muraabahah deal. In a Muraabah  deal, a man sells his own property. Without a property belonging  to one, the question of a sale and a Muraabaha deal simply does  no arise. The explanation about the deal ‘conforming with the  Shariah’ and “the practical difficulties” related to the “laws of  the Republic of South Africa”, are errant bunkum presented in an  endeavour of self-beguilement and to present a ridiculous veneer  to cover up the noxious stench of riba which this deal emits.

The fact of reality is that Albaraka NEVER purchased the  property. It granted the client an outright loan on which it  charged almost 100% interest. The Bank concedes in its letter  that it had acted in contravention of its “normal practice of  purchasing the property from the registered owner”. Instructing  the client to take transfer of the property directly into his name  does not elevate Albaraka Bank to the status of ownership. The  stark truth is that Albaraka advanced the client a loan of cash  (R760,000). The client utilized the greater part of this loan to  pay the outstanding balance owing on the property. Albaraka  levied on this loan interest to the tune of R674,000.

According to the Shariah, Albraka’s farcical ‘Murabaha Facility’  transaction is a haraam riba deal. The following explanation of  the deal provided by the client further confirms the fallacy of the  ‘Murabaha Facility’ claim of Albaraka Bank:

“A Close Corporation (CC) purchased a property comprising a  block of flats for R930,000. The members of the CC paid a  deposit of R230,000 on behalf of the CC to the seller and  Albaraka Bank (AB) paid an amount of R700,000 to the seller in  respect of the balance of the purchase price, plus also advanced  an amount of R60,000 to the CC for repairs, renovations and  improvements to the property. A Murabaha agreement was  signed whereby the CC was to pay AB the capital of R760,000  plus so-called profits of R 674,000 giving a total of  R1,434,000.” 

The facts of the case thus are as follows:

? The client (the CC) initially purchased the property.

? The purchase price agreed on by the buyer (the CC) and  the seller is R930,000.

? The CC paid a deposit of R230,000. It required a further  R730,000.

? The CC applied to Albaraka Bank for a loan to pay the  outstanding balance on the property. The Bank granted  the loan.

? In addition to the R700,000 required to pay the balance  of the purchase price, the CC required a further R60,000  for renovations. This loan too was granted by the Bank.

? Albaraka Bank then pretended that the R700,000  advanced to pay the balance of the purchase price, plus  the R60,000 given for renovations constituted the ‘price’  of a fictitious building which it had ‘purchased’ in its  imagination. Stating this figment of its imagination on  paper, the Bank brazenly – without fear for man or Allah  – lists the cost price of the building which was bought by  the client (the CC) as being R760,000. But the price was  R930,000 of which the clients themselves paid R230,000  directly to the owner of the building. The paper purporting to be a ‘Murabaha Facility’ can never conceal  the villainy and hurmat of this plain riba transaction.


The ruling of the Shariah pertaining to the aforementioned riba  transaction is that the Bank has to compulsorily refund the client  the sum of R674,000. This amount is haraam money in the  Bank’s coffers. It belongs to the clients (the CC). It cannot be  given to charity because the clients are still alive and not  missing. And if they are missing, their heirs are very much alive  and looking ravenously at the large sum which the Bank had  acquired from the clients under the baseless guise of ‘Murabaha  Facility’.


In its fallacious ‘Murabah Facility’ agreement, Albaraka Bank  stipulates:

“Registration of a first Mortgage Bond over the property  described as…………………….in the sum of R1,434,000  plus a contingency sum of R287,000 in favour of  Albaraka Bank Limited.” 

What is this additional haraam riba ‘contingency sum of  R287,000’ payable on the already huge sum of R634,000 riba?  The Bank has some explaining to do.

Another haraam riba stipulation reads:

“In the event of the Purchaser (sic) failing to make  payment of any amount/s due and payable in terms of  this agreement, the Purchaser promises / undertakes and  binds himself / itself to pay to the Bank a penalty /  penalties within 30 days of the date of default calculated  at the rate of nought comma one percent (0,1%) per day, during the period of default, on the amount/s overdue  from the due date/s of payment thereof to the actual  date/s of payment thereof.” 

This ‘penalty’ charge is a glaring riba charge portrayed as a  ‘charity’ charge by those whose hearts have become desensitised  as a consequence of devouring riba. We have published two  booklets on this haraam riba-penalty. Whoever is interested to  study this question, may write to us for the two booklets on riba-penalty.

The spiritual insanity and intellectual derangement of those who  devour riba are conspicuously confirmed by the fact that a  massive riba charge of R634,000 on a R760,000 loan fails to  satiate their pecuniary cravings. Thus, they come within the full  glare of the Qur’aanic castigation:

“Those who devour riba do not stand except as  one who has been driven to insanity by the touch  of shaitaan.” 

Now when the clients are in financial stress and cannot meet  their commitments, the Bank conducts itself with Yahudi attitude  and instituted legal action. The clients (the CC) contends:

“Despite all reasonable attempts by the CC and its members  imploring AB to resolve the matter amicably and give sufficient  time to reschedule payments or find alternative buyers, AB has  proceeded with legal action relentlessly applying undue  pressure.” 

It is haraam for Albaraka Bank to utilize Qur’aanic verses and  moral precepts of the Shariah such as Qardh Hasan and Islamic  Brotherhood to promote and sell its riba products. It lacks the  faintest idea of the Qur’aanic concept of a Beuatiful Loan and  Islamic Brotherhood. When it comes to money, the devourers of riba throughout the world will truly succeed in squeezing blood  from stones. That is because the Qur’aan says that they are  “driven to insanity by the touch of shaitaan.” 

All those who have suffered the misfortune of dealing with these  so-called Islamic Banks, only begin to realise the villainy of the  riba-operators when they apply the pressure of the kuffaar legal  institutions to suck out the riba from clients reduced to penury  under the satanic yoke of haraam riba.


Albaraka Bank as well as other Muslim banks of the same ilk  should take note of the Qur’aanic ultimatum and declaration of  war on those who deal in riba. These banks have two options:  Either to set their houses in order by bringing their operations  and products fully within the confines of the Shariah, or to close  up shop and branch off into some halaal avenue in the pursuit of  their rizq.


Albaraka Bank has attempted to pass off its products as halaal on  two grounds:

(1) That trading in shares of joint stock companies is lawful.

(2) That the Shariah allows investment in haraam businesses  to earn haraam money, primarily riba, provided that the  amount is small and that it will be ‘purged’ by giving it  to charity.

Both these contentions are fallacious. Shares, as has been  explained in this booklet, are haraam. The joint stock company is  not a valid Shar’i partnership (shirkat) enterprise. Buying and  selling shares is not permissible. Buying and selling unit trusts are likewise not permissible. The  dividend earned is haraam riba. Investing in these Muslim-owned  banks is not permissible.

“Those who devour riba do not stand except as  one driven to insanity by the touch of shaitaan.”  (Qur’aan) 


“Those who devour riba do not stand except as  one who has been driven to insanity by the touch  of Shaitaan. This is because they say: ‘Verily,  trade is like riba while Allah has made lawful  trade and made riba unlawful.”  (Surah Baqarah, aayat 275) 

The so-called Islamic banks intransigently refuse to set their  house in order. This intransigence is the product of the shaitaani  insanity mentioned in the aforementioned Qur’aanic verse. It is a  simple issue for these banks to restructure their transactions with  only a little effort.

It is a simple matter to bring their trade transactions fully within  the bounds of the Shariah if they are truly concerned about the  Deen of Allah Ta’ala and if they can bring themselves to  understand the vital need for Halaal income. The Muslim  community will be only too happy to deal with Muslim banks if  they streamline their affairs to conform with the Shariah.  Presently, they are employing deception by their utilization of  Islamic terminology for deals which are 100% replicas of the  transactions of the riba capitalists.

The Muslim-owned banks, contrary to their claims, do not  purchase any tangible commodities (maal). The claim they  tender in this regard is a massive falsity and deception. They do  not deal in maal. They deal in only finance – money. They sell  money, and their ‘profit’ is pure riba. Their thinking ability has  been affected and deranged by the shaitaani produced insanity  because they intransigently persist with the fallacious claim that  their riba dealings are halaal trade. Just as the mushrikeen of  Arabia had intransigently insisted that their riba was like trade,  so too do these banks claim.

These banks will be able to comply with the Shariah only if they  agree to think along Islamic lines. But they plot all their dealings  in strict accordance with the riba procedures and methods of the  kuffaar capitalists right down to the finest detail.

Their so-called shariah boards act as mere rubber stamps for all  the un-Islamic and riba transactions fabricated by the banks. The  shariah boards are despicable subterfuges providing ‘legality’ for  the riba contracts and agreements. Since these boards are directly  associated with the banks and the molvis and sheikhs serving on  these boards are employees of the banks, they (the molvis,  muftis and sheikhs) are incapable of presenting the Haqq of the  Shariah. They are perennially searching for interpretations to  sanctify and sanction the riba deals of the capitalist banks.

They only need to divest themselves of the riba mentality  acquired from the kuffaar capitalists and figure out simple ways  to ensure that their dealings comply with the Shariah. This is  neither an insurmountable nor a difficult task. It is their  intransigence and their determination to follow the riba path of  the western entrepreneurs which induces them to believe that  banks in this age cannot operate if run strictly according to the  Shariah. This mentality is the consequence of the shaitaani insanity stated in the Qur’aan.

If they obstinately refuse to bring their house in order to comply  with the Shariah, let them then take notice of the Divine  Ultimatum. The Qur’aan issues the following declaration of war  to the riba capitalists:

O People of Imaan! Waive (leave off) what  remains (for you) of riba if indeed you are  Mu’mineen. And, if you do not do so, then take  notice of war from Allah and His Rasool. And, if  you repent (and abandon your riba demands),  then for you is your capital amount (which you  had given as a loan). Do not commit oppression  and you will then not be wronged.”  (Surah Baqarah, aayats 278 and 279) 

Compliance with the Qur’aan requires a complete waiver of all  interest which the bank demands under guise of its ‘penalty  clause’. All riba agreements have to be cancelled and the riba  charged (finance charges, etc.) has to be compulsorily refunded  to the oppressed debtors. Only then can the Muslim-owned  banks be saved from the Ultimatum of War from Allah and His  Rasool. This War will continue from this dunya right into the  Aakhirah. If they refuse to set their house in order, they should  clearly understand their loss as the Qur’aan states:

“They are losers in the dunya and in the  Aakhirah.” 


All Muslims know and understand that  insurance is haraam even if they indulge in  this riba-qimaar sin.

Albaraka Bank, in fact all Muslim-owned  capitalist riba banks have incorporated  insurance as a binding condition for  granting finance (loans).

The insistence on insurance further testifies to  the scant regard these riba banks have for  the Shariah. Their primary concern is to  safeguard their monetary interests even at  the cost of purchasing Jahannum and the  Wrath of Allah Ta’ala.

Every agreement of these banks makes insurance  mandatory. This demand belies their claim  of being ‘Islamic’.  

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