Is it permissible to purchase a car through the bank with Murabaha financing, whereby the bank finances 75% of the car's price chosen by the buyer, and the amount is paid in installments with a 6.5% Murabaha over 5 years, knowing that the car is not available at the bank and the bank stipulates registering the car in the buyer's name and mortgaging it to the bank?
For an operation to be a legitimate Murabaha, the bank must purchase the car and acquire its ownership, then sell it to the client; otherwise, it is an interest-based loan. There is no harm in the bank stipulating cooperative insurance for the car. However, commercial insurance is not permissible unless it is mandatory by the state.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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