{"id":14835,"date":"2020-05-13T17:14:37","date_gmt":"2020-05-13T17:14:37","guid":{"rendered":"http:\/\/daruliftabirmingham.co.uk\/?p=14835"},"modified":"2020-05-13T17:14:37","modified_gmt":"2020-05-13T17:14:37","slug":"does-dividend-stock-pay-interest","status":"publish","type":"post","link":"http:\/\/daruliftabirmingham.co.uk\/home\/does-dividend-stock-pay-interest\/","title":{"rendered":"Does Dividend Stock Pay Interest?"},"content":{"rendered":"

\n\tFatwa ID: 03687<\/strong><\/span><\/span><\/span><\/span><\/span>\n<\/p>\n

\n\tAnswered by: Imam Abdul-Malik Sheikh<\/span><\/span><\/strong><\/span><\/span><\/span>\n<\/p>\n

\n\t \n<\/p>\n

\n\tQuestion<\/u><\/strong><\/span><\/span>\n<\/p>\n

\n\tDividends stocks pay the shareholder a certain amount of money every couple of months (if the shareholder holds the stock and doesn't sell it). For example, if a stock is £50, the company might pay the shareholder £5 every month for as long as the shareholder has the stock. Is this interest?<\/span><\/span>\n<\/p>\n

\n\t \n<\/p>\n

\n\t\u0628\u0650\u0633\u0652\u0645\u0650 \u0627\u0644\u0644\u0647\u0650 \u0627\u0644\u0631\u0651\u064e\u062d\u0652\u0645\u0646\u0650 \u0627\u0644\u0631\u0651\u064e\u062d\u0650\u064a\u0652\u0645<\/span><\/strong><\/span><\/span>\n<\/p>\n

\n\tIn the name of Allah, the Most Gracious, the Most Merciful<\/u><\/strong><\/span><\/span>\n<\/p>\n

\n\t \n<\/p>\n

\n\tAnswer:<\/u><\/strong><\/span><\/span>\n<\/p>\n

\n\tDividends are usually paid from the profits of stock shares to the shareholders. Normally, such dividends would be considered permissible. The proportion of profit must be agreed upon at the time of contracting. However, if the profit is generated through interest, then the dividends will not be permissible.<\/span><\/span>\n<\/p>\n

\n\t \n<\/p>\n

\n\tAccording to Shari’ah, the returns of joint ventures (Mush\u0101rakah) are to be based on actual profit and not interest. Furthermore, all shareholders will bare the profit or loss and therefore the amount of profit cannot be fixed. <\/span><\/span>Interest-based<\/span><\/span> ventures predetermine a fixed rate of return regardless of loss or profit and this is not permissible.<\/span><\/span>\n<\/p>\n

\n\t \n<\/p>\n

\n\tIn Islamic finance, the ratio of profit for each shareholder must be determined in proportion to the actual profit accrued to the stock, and not in proportion to the capital invested by each person. It is not allowed to fix a lump sum amount for <\/span><\/span>anyone<\/span><\/span> of the partners, or any rate of profit tied up with his investment.*<\/span><\/span>\n<\/p>\n

\n\t \n<\/p>\n

\n\t*See ‘An Introduction to Islamic Finance’ by Mufti Muhammad Taqi Usmani p.17-21<\/em><\/span><\/span>\n<\/p>\n

\n\t \n<\/p>\n

\n\t \n<\/p>\n

\n\tOnly Allah knows best<\/span><\/span>\n<\/p>\n

\n\tWritten by Imam Abdul-Malik Sheikh<\/span><\/span>\n<\/p>\n

\n\tChecked and approved by Mufti Mohammed Tosir Miah<\/span><\/span>\n<\/p>\n

\n\tDarul Ifta Birmingham<\/span><\/span>\n<\/p>\n

\n\t <\/p>\n","protected":false},"excerpt":{"rendered":"

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