Ruling on tawarruq involving metals via al-Jazeera Bank
Question We want Al-jazeera bank to finance us by using our property as a guarantee. They evaluate the property and give us 60 to 70% of its value. They finance is by selling metals. We are worried about this, but this is the only bank that accepted to finance us this way. Is this halal…
Question
Praise be to Allah.
If the bank is selling the iron to you, and you yourself are
selling it in the market in order to acquire money, then this is tawarruq
that is acceptable in sharee’ah. But if you are not selling it yourself,
rather you are delegating the bank to sell it, then this is called tawarruq
that is organized by the bank, and a resolution of the Islamic Fiqh Council
has stated that it is haraam. Academic research by a number of specialists
has also shown that this transaction is haraam. For a detailed discussion of
that, please see the answer to question no.
82612 and
98124.
Dr. Muhammad al-‘Usaymi (may Allaah preserve him) was asked
about the ruling on financing involving metals with the al-Jazeera Bank.
He replied: I do not think that tawarruq involving metals is
permissible unless the customer actually takes possession of them, then
sells them to someone other than the dealer from whom the bank bought them.
If all of that is not done, then it is not permissible. End quote.
The prescribed alternative is to purchase real goods from the
bank, such as cars and so on, which the bank takes possession of and brings
to its own location, then the bank sells them to you, and you go and sell
them in the market after that in order to obtain cash.
And Allaah knows best.
