"My understanding was that only in extreme cases should a Muslim tolerate riba. For example, scholar
  • "There are fundamental differences between the two situations you ask about. In one situation, the primary business of the institution is clearly prohibited owing to its transacting in riba. In the other, the primary business may be either lawful or unlawful. Moreover, while the lawfulness of one situation is indeed based on necessity, the lawfulness of the other is not.

    Let me explain this in a little more detail. When it became apparent that there was a real need for people to place their money in banks, in order to protect it, to transfer it, to have easy access to it, and to allow others to have access to it, they brought their problems to the scholars of fiqh. When it became apparent that their problem represented a real need, legal license was extended, on the basis of necessity, to those in need of placing their money in bank accounts at conventional (riba-based) banks. This was because no practical or reliable alternative existed. Later, with the establishment of Islamic banks, this license was revoked; but only in regard to those with access to such banks. For example, someone living in Topeka, Kansas might continue banking at a conventional bank; whereas people in the Gulf, where Islamic banks have proliferated, have an alternative to conventional banks, and must therefore avoid the conventional banks.

    So, to summarize, permission (to bank at conventional banks) was given on the basis of necessity. Permission to invest in stocks, however, is not based on any sort of necessity. Buying and selling are voluntary activities. No one (under normal circumstances) needs to buy or sell in order to survive. So the lawfulness of buying and selling stocks is not based on legal license. Rather, buying equity shares of businesses on the stock market is lawful when the primary business of the security is lawful, and when a specific set of financial ratios are found to be within certain limits. All of this has been explained in detail in Lesson One. See the third section, entitled: The Stock Market, and the sections which follow it.
    The answer has been taken from various sources of scholars, academics and muslim inspire research team – and we do not verify its accuracy And Allah knows best."