Outlining six norms for investment in capital market by Muslims,Islamic seminary Darul Uloom Deoband has said followers can invest in the equity of a company which is not involved in production of liquor and interest-based businesses.
Mufti Fakhrul Islam while issuing a fatwa said Muslims can invest in those companies which have movable as well as immovable properties.
The seminary said that a part of the profit should be distributed among the poor. Besides,it has also advocated for taking informed decisions before making investments in the equity market.
An investor is required to register protest in the shareholders meeting if they come to know that the company earns or pay interests for doing its business,Mufti said.
It has also cautioned that people should not invest in those companies whose sole objective is profit-maximisation.
The move assume significance as questions were raised here from quite some time regarding whether a Muslim can participate in share market.
Prime Minister Manmohan Singh had earlier asked the Reserve Bank of India (RBI) to look into Islamic banking practices in Malaysia.
There is a pressure on the central bank to introduce such a system,a kind of interest-free banking system,in the country.
The move could fetch billions of dollars in investments from countries in the middle-east.
As per estimates,close to USD 1 trillion is being managed by about 400-500 Islamic banks worldwide and by 2020,the figure is expected to touch USD 4 trillion.
The judiciary,however,is not favourably disposed towards Islamic banking institutions in India.