What is the ruling on borrowing from a bank through Tawarruq if the bank gives the borrower the choice between selling the commodity or authorizing the bank to sell it on their behalf, and stipulates compulsory life insurance for the borrower, paid once in advance?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
It has been previously clarified that Tawarruq is permissible, whether the seller of the commodity after its purchase is the customer himself or the bank acting as an agent. However, debt insurance is forbidden, whether it is insurance on the debt itself that the insurance company pays if you become unable, or life insurance absolutely unrelated to the debt. Therefore, it is not permissible to proceed with this type of Tawarruq due to its association with forbidden insurance.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/64363
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- Ftawy
- Original fatwa ID
- 64363
- 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.
- Read the full ruling
- Read the full answer on Ftawy