Banking: Bank’s Liability for Losses in a Profit-Sharing Investment Deal
Practical Laws of Islam as per the teachings of Imam Khamenei
Banking: Bank’s Liability for Losses in a Profit-Sharing Investment Deal
English:
Question #1916:
A person received a sum of money from a bank for investing in trade. It was agreed that the bank would be a partner and receive a share of the profits. If the business made a loss, would the bank share the loss?
Answer #1916:
In a silent partnership, the loss would be borne by the capital and its owner. It would be made up by profit. However, there is no objection if the two parties conclude the contract with the provision that the working partner sustain the loss wholly or partly.
-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Banking