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What is the ruling on bank Tawarruq, in which the client buys goods from the bank in installments, then sells them to a third party through the goods supplier, taking into account the suspicions raised regarding legitimate possession and the third party's authorization to sell?

1 min readAlso available in العربية

It is permissible to follow the trusted Shariah Supervisory Board that oversees the transaction. The issue of selling goods before taking possession of them is a matter of dispute, except for food. The majority of scholars agree that it is not permissible to sell food before taking possession of it. The preponderant opinion is that possession of the sold item is necessary before reselling it, whether it is food or anything else. Providing warehouses is not a condition for transferring goods; rather, what is considered actual or constructive possession is sufficient. Possession differs according to the item and custom. Examples of constructive possession include the buyer receiving shipping documents for imported goods. Furthermore, it is permissible for the buyer to authorize another person to take possession of the goods, even if the agent is the seller, unless there is collusion between them.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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