Is the transaction, which consists of the Bahrain Defence Force Consumer Association purchasing electronic devices from a leased company and selling them in installments to the employees of the Defence Force, knowing that the Association is an intermediary and does not own the devices, and their price is fixed whether in installments or cash, prohibited?

The described transaction is called "Murabaha to a purchaser" and is permissible if two conditions are met: First, the institution must own the commodity before selling it, and second, it must take possession of it before selling it. If the institution does not purchase it and merely gives the employee a check for the amount, then it is a loan. If it is without an increase, it is a good loan (Qard Hasan (definition)); if it is with an increase, it is a usurious loan (Riba) and forbidden. However, if the institution purchases the device and sells it before taking possession of it, then that violates the Prophet's (peace be upon him) prohibition of selling a commodity before taking possession of it. Possession, in this context, means the physical transfer of movable items like devices and cars.