What is the ruling on taking a new Tawarruq (monetization) to pay off an old Tawarruq, given that the bank will deduct the old loan from the new Tawarruq, and is the Sharia board's approval of the contracts sufficient to rule on Tawarruq?

The transaction mentioned is a form of debt rescheduling, which is Islamically prohibited. It is a form of "debt-on-debt" (fasakh al-dayn fi al-dayn), which is forbidden.

The resolution of the Islamic Fiqh Council explicitly states that "debt rescheduling" is the sale of a debt to the debtor for a deferred price that exceeds its original amount, and this is a form of prohibited usury (riba).

The Council also considered that anything that leads to an increase in the debt owed by the debtor in exchange for an extension of the term, or serves as a pretext for it, is considered a form of "debt-on-debt" (fasakh al-dayn fi al-dayn), which is Islamically prohibited. This includes the creditor and debtor creating a new debt to settle the first debt, such as the debtor purchasing a commodity from the creditor for a deferred price and then selling it for a cash price to settle the initial debt. This is impermissible as long as the new debt is for the purpose of settling the first one, whether by condition, custom, collusion, or systematic arrangement, regardless of whether the debtor is solvent or insolvent, whether the first debt is due immediately or deferred, whether the agreement is made in the first contract or thereafter, and whether it is at the request of the creditor or the debtor. The prohibition also includes cases where this is arranged by the creditor or guaranteed by him for the debtor.

Accordingly, it is not permissible to enter into this transaction if the settlement of the first debt is a condition for and the cause of the second tawarruq transaction. A Muslim who knows something is forbidden is not permitted to proceed with it, and a fatwa from a scholar permitting it or a ruling from a judge does not benefit him, because a judge's ruling does not make lawful what is unlawful.