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The question

What is the ruling on Murabahah which involves an institution or bank purchasing a commodity for a beneficiary and registering it directly in their name without taking possession of it, after which the beneficiary repays the institution or bank in monthly installments with a known increase?

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Source: FtawySummary from Ftawy's records · added here Sep 2, 20261 min readAlso available in العربية
The answer

This type of contract is called Murabaha to the one who commands the purchase (Murabaha for the Purchaser), and it goes through three stages: a promise from the one who commands the purchase, then the commanded party buys the commodity, so it enters into his possession, and then the commanded party sells it to the one who commanded. This promise is not binding on the one who commands, and if they were to agree on it being binding, the contract would be invalid; because they would have contracted on something not yet owned by the seller among them. If the contract between the one who commands and the commanded party is concluded after the commodity has entered into the possession of the commanded party, then the contract is valid and permissible. Writing the commodity in the name of the buyer directly does not harm, because it entered into the possession of the seller (the commanded party) upon the completion of the contract.

Summary from Ftawy's records · added here

Reviewed by El Fatwa's sharia committee.

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Where this answer came from
Source platform
Ftawy
Original fatwa ID
30808
Added here
. This is when the answer was added to El Fatwa, not the fatwa's date.
Text
Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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Read the full answer on Ftawy