Bridging the gap between Halal and Ethical: Mufti Taqi Usmani on Ethics, Investment and the Future…

When most of us think about money and our Deen (if ever we are inclined to), one question usually dominates the entire conversation. Is it halal or is it haram? Can I take this mortgage, can I buy these shares, is this fund permissible? We want a yes or a no, and once we have it, we move on. I’m as guilty of this as anyone, which is partly why I think it’s a good idea to put pen to paper on some personal thoughts based on what I have read, heard and watched over the past few weeks.

Not a living soul inspires me more than the eminent Mufti Muhammad Taqi Usmani, the foremost scholar and Mufti of the entire Muslim world. It goes without saying that his contribution to Islamic finance over the last few decades is hard to overstate. His answer to the question of Islam and ethics, and how he navigated it was further evidence of his incredible body of knowledge and work. His answers turned into a much wider discussion about Sharia compliance, Islamic morality, the institutions that serve us, and what we owe as Muslims in all of this.

What really impressed me was how he was able to explain centuries’ worth of difficult, complex Islamic legal theory and detailed principles of jurisprudence so clearly and meticulously, often in just a few sentences. He’d go from mortgages to investment funds to defence companies to tech, and if you weren’t paying attention, you’d miss a lot of what he was drawing on. I had to rewind more than once just to catch it all. I guess this piece is my attempt to unpick some of what he said, since it is too valuable to omit.

Starting with Halal

The first point he made was that something can be permissible in Sharia and still fall short of the higher standard Islam sets for us. Our scholars have always recognised this. A contract can be valid and a deal can be allowed, but not everything that is allowed is an example of fairness, generosity and ihsan our Deen asks of us.

How many a landlord have we seen who charges the highest rent he can get. As long as the terms are lawful, the rent may well be permissible. Whether he is being generous or compassionate is a separate question. The same applies to a business selling halal food whilst paying its staff less than the minimum wage, or a bank offering a Sharia-compliant home finance product that many Muslim families can’t afford.

That’s not to say every high price or every low wage is haram. I’m well aware that businesses face real pressures, and we have to judge fairness in context. But if we can defend something legally, that doesn’t mean we’ve maximised our efforts or fulfilled our Islamic responsibility.

The Prophet ﷺ tied the blessing of trade to honesty:

البَيِّعَانِ بِالخِيَارِ مَا لَمْ يَتَفَرَّقَا، فَإِنْ صَدَقَا وَبَيَّنَا بُورِكَ لَهُمَا فِي بَيْعِهِمَا، وَإِنْ كَتَمَا وَكَذَبَا مُحِقَتْ بَرَكَةُ بَيْعِهِمَا

“The buyer and seller have the option to cancel as long as they have not parted. If they are truthful and make things clear, their sale will be blessed, but if they conceal and lie, the blessing of their sale will be wiped out.” (Sahih al-Bukhari 2079)

Muslims trading according to the pure sunnah have always cared about more than whether a contract would hold up in court. Practice went beyond what was on paper. That raises a fair question for the Islamic finance industry, and for those of us who use it. Are we simply copying conventional products and making them compliant on paper, or are we trying to build something that reflects what our Deen is aiming for?

Halal, but is it the best we can do?

It’s probably worth being a little careful here. If something is genuinely halal, we shouldn’t call it un-Islamic as though it were forbidden. That confuses two different questions. However, I do think there is a line somewhere between Halal and Islamic that we need to navigate.

What we can say is that something permissible might not live up to the full spirit of Islam. A bank can offer an expensive home finance product that ticks every compliance and legal box, and still do very little to help people buy a home. A trader can make a valid sale without being considerate. A business owner can operate lawfully and give very little back to the community around them.

I have previously written about the Maqasid al-Sharia, the higher objectives of the Deen, which include justice, protecting wealth, human welfare and preventing harm. So the gap I’m describing is between doing the minimum that’s allowed and striving for what Islam hopes we will achieve. We have to do the minimum, and we too often forget the ihsan.

Same product, different ruling

The part I found most interesting was his discussion of companies whose products can be used both for good and for harm.

Weapons are the obvious example. Making and selling weapons isn’t haram in itself. People need them for legitimate reasons, including self-defence and protecting innocent lives. But imagine three scenarios. A manufacturer supplies equipment to a country defending itself against aggression. The same manufacturer sells to an armed faction in a civil war, knowing the weapons will probably be used in unlawful attacks. Or a company knowingly supplies weapons, ammunition or targeting equipment to forces deliberately attacking civilians.

The product is the same in all three, but the situations are very different. The question we need to ask is whether this particular sale helps someone do wrong. And this applies whoever the victims are. Islam prohibits oppression and unlawful killing against any human being.

The classical jurists discussed this when they wrote about selling weapons in times of fitna, where the seller would be strengthening people engaged in wrongful violence. It’s hard to read those discussions without thinking of Sudan, Yemen, Israel and elsewhere, where serious abuses have been committed against civilians. If a company sells to a recognised government, does that settle the matter? What if there’s credible evidence the buyer is using the equipment for atrocities? What if the buyer is a militia? A company may have every legal right to make something, but that doesn’t settle the Islamic ruling on every sale of it, or every investment in it. We have to ask what the parties knew and how much they contributed.

What about Palantir?

This is why Mufti Taqi Usmani’s mention of Palantir was so relevant.

Palantir builds advanced data analysis and AI systems. Hospitals, logistics firms, public services and security agencies all use this kind of technology for legitimate purposes. But militaries can also use the same capabilities for intelligence, surveillance, battlefield analysis and identifying targets.

In January 2024, the company entered a strategic partnership with Israel’s Ministry of Defence to support its military operations. Since the “strategic partnership” with Israel, it has significantly expanded its support for the military campaign in Gaza and operations in the West Bank, with its software reportedly combining intercepted communications and satellite imagery to generate targeting lists.

That raises serious questions in light of the genocide in Gaza. A report by UN Special Rapporteur Francesca Albanese found reasonable grounds to believe it supplied the AI platform behind the targeting systems Lavender, Gospel and Where’s Daddy. It has also faced protests over its role in powering ICE deportations in the US, and founder Karp’s 22-point manifesto, which claimed some cultures are regressive and harmful, caused further alarm. In Britain, MPs who criticised the firm in Parliament received letters they described as intimidating, and a £240m Ministry of Defence deal was awarded without competitive tender.

Amnesty International has also raised concerns about Palantir and called for responsible divestment. Investors such as Storebrand and the Dutch pension fund ABP have since divested. In England, NHS organisations that care for millions of people are rejecting Palantir’s patient data technology, believing they can find better or equal alternatives in many cases. More than 44,000 patients have filed formal legal data-processing objections, and thousands have withdrawn their records via the national opt-out system. It is no surprise their reputation has taken a battering.

I’m not in a position to issue a fatwa against Palantir, or pass a judgement on every shareholder. My point is actually rather simple. We can’t assess a tech company just by saying ‘it makes software, and software is halal.’ We also have to ask how its customers are using that software, and whether there’s credible evidence that it’s contributing to wrongdoing. That is a manual human process that can’t be covered by automated profit/loss reports.

And this goes well beyond one company. Developers build AI that can detect cancer early or stop fraud, and governments can use the same tools to monitor civilians or select targets unlawfully. A drone company might sell to farmers or search-and-rescue teams, but the picture changes if it knowingly supplies drones for attacks on civilians. Cloud providers normally offer a harmless service, unless they knowingly build systems that help a regime persecute people. Shipping firms do nothing wrong by moving goods, unless they knowingly ship weapons for an unlawful operation. Even banks lending or investing through halal structures need to look again if they are funding oppression or killing.

These cases aren’t all the same in fiqh. How directly someone is involved, and how much they know, can lead to different rulings. A company making computer chips isn’t answerable for every crime someone commits with a device that contains one of its chips. An ordinary shareholder isn’t in the same position as a contractor funding a specific military operation. But we also can’t ignore serious, public evidence just because a product has other uses. Nobody can use a product’s lawful uses to excuse knowingly enabling an unlawful one. When the facts change, the ruling can change too.

When do we share in someone else’s actions?

All of this took me back to Ma’ariful Qur’an by Mufti Muhammad Shafi Usmani rahimahu-Allah, Mufti Taqi’s father. In his commentary on Surat al-Nisa, verse 85, he explains how a person can share in the reward, or the sin, of something they helped bring about. Allah says:

مَّن يَشْفَعْ شَفَاعَةً حَسَنَةً يَكُن لَّهُ نَصِيبٌ مِّنْهَا ۖ وَمَن يَشْفَعْ شَفَاعَةً سَيِّئَةً يَكُن لَّهُ كِفْلٌ مِّنْهَا

“Whoever helps a good cause will share in its benefits and whoever helps an evil cause will share in its burdens.” (Surat al-Nisa 4:85)

Mufti Shafi distinguishes between someone who puts in a good word for another person and someone who uses their influence to bring about something unjust. He was writing about intercession and recommendation rather than buying shares, but he gives us a sound starting point for thinking about what it means to help someone else act. Allah sets out the wider principle in Surat al-Ma’ida:

وَتَعَاوَنُوا عَلَى الْبِرِّ وَالتَّقْوَىٰ ۖ وَلَا تَعَاوَنُوا عَلَى الْإِثْمِ وَالْعُدْوَانِ

“Help one another to do what is right and good; do not help one another towards sin and hostility.” (Surat al-Ma’ida 5:2)

The scholars called this i’ana ‘ala al-ithm, helping someone in sin. But Allah also tells us that “no soul will bear the burden of another” (Surat al-An’am 6:164). So we aren’t responsible for everything done by everyone we happen to be connected to. What we need to ask is whether we ourselves are taking part in the wrong, enabling it or helping it along.

This is where the scholars looked at the finer details. Is the person helping directly or indirectly? Do they know the purpose is wrong, is it reasonably clear, or do they only suspect it? Is the deal tied specifically to the harm, or is it an ordinary transaction with lots of possible uses? Does their involvement actually make the harm happen? And is the investor buying shares in a large established company, funding a particular project, or holding a small stake through a fund? The answers can decide whether something is permissible, whether we share in a sin, or whether the deal is technically allowed but still doesn’t sit right. Mufti Shafi explains it in great detail in volume 2 of his Jawahir al-Fiqh, a treatise spanning about 30 sides.

Our scholars didn’t always agree on the answers either. When they discussed whether someone could sell grapes to a person planning to make wine, the madh-habs reached different conclusions about indirect help. So it would be wrong to declare every investment in these industries haram, and just as wrong to assume everything is fine because the product has some legitimate use somewhere. We have to look at how closely the investment is actually linked to the wrongdoing.

Do your homework, but you don’t have to know everything

Mufti Taqi Usmani made another point that I found genuinely helpful. As I understood him, he was saying we don’t have to chase down every possible scenario before we make a decision.

Say you’re thinking of investing in a tech company. Its accounts tell you what it does. Journalists have reported on some of its contracts and partnerships. Investigators or human rights groups might have raised concerns about certain projects. As a Muslim, you should take that seriously. But do you then need to go through every contract, every subcontractor, every possible use of the technology and every decision a customer might make? That isn’t realistic. If we held ourselves to that standard, most of us would never make a decision at all, because we’d be waiting to find out things that are confidential or simply unknowable. Islam has never placed that kind of burden on us.

We judge based on what we can reasonably know, and on how serious the decision is. That doesn’t mean we look the other way because the answer might be uncomfortable. It just means we can make a sensible judgement without being completely certain.

Think about three situations. In the first, a company makes something with good and bad uses, but nobody has produced credible evidence linking it to any particular harm. In the second, reliable reports raise serious concerns about its role in grave abuses, though people dispute how much it contributed. In the third, the company openly admits supplying equipment for an operation that is clearly unlawful. These aren’t the same. In the second case, you might already have good reason to avoid it on ethical grounds, even if you couldn’t say for certain that it’s haram. In the third, you’d be facing a far more serious question.

Not knowing everything doesn’t stop us making a moral judgement, and having a moral concern doesn’t mean we’ve issued a fatwa. We should also be fair about who is responsible for what. Someone with a few hundred pounds in an ISA isn’t in the same position as a professional fund manager or a Sharia board. Institutions managing other people’s money have the resources, and the duty, to look much harder. We don’t need to go down a rabbit hole of ever more distant connections. But when someone puts credible evidence in front of us, we can’t pretend we haven’t seen it. Allah asks us to make an honest judgement based on what we can reasonably know.

Why are Islamic mortgages so expensive?

He also responded to a complaint many of us have made: why do Islamic mortgages often cost more than conventional ones?

He encouraged the banks to bring their costs down and make their products more affordable. He also reminded us, as customers, that offering a genuine alternative does cost more, especially whilst the sector is still developing. I think both of those points need making. Islamic banks can’t put a halal label on something and charge whatever they like. They need to be efficient, transparent and competitive. At the same time, we as customers need to appreciate what it takes to build an alternative financial system.

The host sat alongside him made a comparison that I found helpful. As Muslims, we don’t eat pork, so we’d never compare the price of halal meat with pork as if they were equal choices. Finance works in a similar way. We’re right to compare prices, especially when we’re worried about affordability. But two products aren’t religiously equal just because they do a similar job. We can’t expect Islamic institutions to build a whole system and then refuse to accept that it costs something. And they can’t expect our loyalty just because of their name. If we want Islamic finance to improve, the people providing it and the people using it both have work to do.

Someone has to build the alternatives

For me, this was his most important point. If we all walk away from Islamic banks because their products aren’t perfect, who will build something better? If nobody supports them, who will pay for the research, absorb the costs and keep improving what’s on offer?

An example Mufti saheb offered was of the halal food industry in the 1950/60s. His father, the grand Mufti of Pakistan, (the same Mufti Shafi’ mentioned above), refused to give a fatwa permitting those in England to eat the meat of Jews and Christians, though their ritual slaughter would ordinarily be permissible for Muslims to eat. Since that fatwa, the UK is now blessed with thousands of halal butchers. If we had rested on our laurels and settled for the meat of the ahl al-kitab, though technically permissible, it would not have facilitated the incredible growth we have seen in the halal meat industry.

I’m not saying we should overlook genuine Sharia problems or bad practice. Exploitative halal mortgages are an issue. Battery farmed chickens are an issue. We should keep pushing for higher standards, whilst also helping the sector reach a point where it can meet them. Islamic finance didn’t appear overnight. Scholars, entrepreneurs, investors and institutions worked through some very difficult problems to get it where it is, and they still need to do that today. Much of that work won’t benefit us directly. It’s for our children, and theirs.

What student finance has taught us

Throughout the session, I kept thinking about the long campaign for Sharia-compliant student finance here in Britain. For years, Muslim students have had to make a hard decision about university because conventional student loans charge interest. Campaigners, scholars, community groups and policymakers have spent a long time pushing for an alternative, and the government has now committed to a takaful-based Alternative Student Finance product, which should go live next year, inshaAllah.

That’s real progress, but we haven’t finished. When it does arrive, people will rightly ask who can access it, how the government runs it, and whether it works for the students it’s meant to help. And there will always be other areas where Muslims still have no halal option. We can’t stop because one thing is nearly there.

What I took from Mufti Taqi Usmani is that we can’t simply enjoy the progress other people worked for. Sometimes we have to give our time, money and comfort for something we may never benefit from ourselves, so that those who come after us have what we didn’t. If we don’t see the result in our lifetime, our effort still counts. Allah doesn’t let a good deed go to waste.

The scholarship behind the answers

What I’ll remember most is how easily he moved between detailed fiqh and everyday money questions. When he gave what sounded like a simple answer about a mortgage or a share, he was drawing on generations of scholars who had written about contracts, intentions, cause and effect, rights and responsibility. Whether someone helps directly or indirectly, whether they know or only suspect, whether something is merely allowed or actually the best course, can change a ruling completely. It’s easy to listen to a scholar give a short answer and not realise how much went into it, and I’m sure I missed plenty, even with the rewind button.

He didn’t pretend Islamic finance is perfect, and he didn’t suggest we should give up on it because of its flaws. When he called for a “change of mentality”, I thought he was right. Islamic finance has to be more than a set of products that have passed a compliance check. The people running it have to work towards the justice, fairness and care for others that make those products Islamic in the first place. And as customers, investors and members of this ummah, we all have a part to play in that.

If you leave this post with anything, let it be this: Avoiding the haram is only half the question. The other half is what we’re doing to build, improve and support the halal.

May Allah preserve Mufti Muhammad Taqi Usmani, grant him health and strength, and let the ummah benefit from his knowledge for many years to come. Ameen.

Sources and further reading

1. AlBaraka Forum, official report of the 5th AlBaraka Summit
2. Mufti Muhammad Shafi Usmani, Ma’ariful Qur’an, Volume 2, pp. 524–529, commentary on Surat al-Nisa 4:85. Read the commentary
3. Quran 5:2
4. Quran 6:164
5. Bloomberg, Palantir and Israel agree strategic partnership (January 2024)
6. Amnesty International UK, No Palantir in our NHS
7. UN Commission of Inquiry findings on Gaza, September 2025
8. UNDP, Heightened Human Rights Due Diligence
9. UK Government, Alternative Student Finance