Topics: Islamic Finance

Is Giving a Fixed Monthly Profit on Investment Permissible in Islam?

Permissibility of Fixed Monthly Profits in Islamic Business Transactions

Question: A businessman takes money from people on the condition that he will trade with it and give a fixed monthly profit of one thousand rupees on every one hundred thousand rupees. If the money is needed, it can be withdrawn with one month’s notice. Is this permissible?

Answer: If a person takes one hundred thousand rupees for trade and gives a fixed monthly profit of one thousand rupees, this is not permissible. This is considered interest (Riba) and such a business is haram (forbidden) because we all know that trade involves both profit and loss. Therefore, participating in trade based on profit and loss is permissible, but giving a fixed profit is not permissible.

✍ Sheikh Maqbool Ahmed Salafi

❪Jeddah Dawah Center – Al-Salamah – Kingdom of Saudi Arabia❫

Author: IslamicHelper

IslamicHelper

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