How does one deal with a banking institution that declares that it is abiding by Islamic principles and offers a “PROFIT and LOSS” account?
When a banking institution declares that it will abide by Islamic principles and offers a “PROFIT and LOSS” account, the onus is on that institution to keep true to its word. According to Islam, contracts are judged on the face value of their terms. In other words, when you deposit your money is such an account and the bank assures you that you are liable to make a loss in as much as you liable to make profit, then no blame attaches to you if you take the bank at its word. When you are certain, however that this is a mere cosmetic to cover up an essentially interest earning account, then the proper course of action is not to deceive oneself. You must, however be certain of your grounds. The proper attitude is to go to the bank and put to them all the questions you need to satisfy yourself of the legitimacy of such an investment. If they assure you that the commission they will be paying you at the end of the year, or any other agreed period, depends on the performance of their own inve
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