In Mumbai, investors protested after one year against Mira Road-based firm named Gold Express Pvt Ltd, who promised halal money return on their investments. Thousands of people invested crores of rupees in the firm in 2019 after a Muslim cleric asked them to invest.
The scam of Gold Express Pvt Ltd was surfaced in 2019. On September 14, 2019, hundreds of investors mostly belonged to Muslim community thronged Naya Nagar Police Station in Mira Road to register their complaints against the operators of a Ponzi scheme.
The case had been registered against eight people, including two directors of Gold Express Pvt. Ltd identified as- Maajid Saliya and Amin Malpara. People were told that those investing under this scheme would continue to get big profits per month under halal earnings. Their model was based on the partnership and profit-sharing instead by the interest which is Haram in Islam.
Up to some period people got money every month and then suddenly the company's office was closed, and its directors and other officials disappeared.
According to the report, thousands of investors had invested around 800 to 1200 Crore rupees. In a video, investors said that in one year, no progress has been seen from the police, so they started protesting once again.
What is Islamic banking?
Islamic banking is grounded in the tenets of the Islamic faith as they relate to commercial transactions. The principles of Islamic banking are derived from the Quran–the central religious text of Islam. In Islamic banking, all transactions must be compliant with Sharia, the legal code of Islam.
To earn money without the typical practice of charging interest, Islamic banks use equity participation systems. Equity participation means if bank loans money to a business, the business will pay back the loan without interest, but instead gives the bank a share in its profits. If the business defaults or does not earn a profit, then the bank also does not benefit.