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Fatwa CenterInvestment fund and its profits
Question
We have a provident fund scheme at our office in which our contributions and employer’s contribution are collected. Is this investment fund and profit Halal if the investment of fund is made in defense saving certificates of govt. of Pakistan and in Faisal Islamic bank?
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His slave and Messenger.
It is forbidden to invest money in Riba (interest and/or usury) banks. The general rule about this is that if the contract stipulates a peculiar given interest related to the invested amount, then this is forbidden as it is pure Riba.
However, any bank or financial institution that adheres to the Islamic way of dealing and that does not guarantee a given profit is lawful to be invested in.
So, if Faisal Islamic Bank deals according to the Sharee’ah using a system where the investor can gain or lose and which respects the Sharee’ah rules in all its transactions, then it is lawful to invest in it. The same rule applies to the certificates of the government of Pakistan. Now, if any of these institutions does not deal according to the Sharee’ah, then it is unlawful to invest in it.
Allaah Knows best.
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