The Ruling on Trading with Zakah Funds
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Fatwa No. ( 12330 )
Q: This cooperative association has a frozen amount in the banks that is not being utilized. This is after completing some of the services required of the association, while keeping the amount as a reserve to cover some emergency expenses. Desiring to obtain a lawful return, we have considered authorizing one of the financial or commercial institutions to trade with it in the trading department, which buys and sells building materials such as iron and cement, and gives us an unspecified profit along with a statement of the materials bought and sold during a specific period. The authorized party takes a fee for the buying and selling operations. We hope you will inform us of the permissibility of such a transaction, which aims to mobilize the funds that are a trust in our necks for the benefit of the Muslims. May Allah reward you with good.
A: If the money mentioned in the question is from zakah, it is obligatory to distribute it in its prescribed channels as soon as it reaches the association. However, if it is not from zakah, there is no harm in trading with it for the benefit of the association, as this increases the benefit for the association’s objectives and its shareholders. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: This cooperative association has a frozen amount in the banks that is not being utilized. This is after completing some of the services required of the association, while keeping the amount as a reserve to cover some emergency expenses. Desiring to obtain a lawful return, we have considered authorizing one of the financial or commercial institutions to trade with it in the trading department, which buys and sells building materials such as iron and cement, and gives us an unspecified profit along with a statement of the materials bought and sold during a specific period. The authorized party takes a fee for the buying and selling operations. We hope you will inform us of the permissibility of such a transaction, which aims to mobilize the funds that are a trust in our necks for the benefit of the Muslims. May Allah reward you with good.
A: If the money mentioned in the question is from zakah, it is obligatory to distribute it in its prescribed channels as soon as it reaches the association. However, if it is not from zakah, there is no harm in trading with it for the benefit of the association, as this increases the benefit for the association’s objectives and its shareholders. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.