What is the ruling of Islamic law on the lending methods used by some banks, where specific goods are purchased for the client and then sold at a higher price based on their instructions, involving multiple sales and purchases at different prices, until the desired amount to be lent to the client is reached, and it is repaid in agreed-upon installments, knowing that these banks are subject to the oversight of a state Sharia authority and an internal Sharia authority?
If the dealings of Islamic banks adhere to the to the Shariah controls in Murabaha or Istisna'a sales, then there is no objection to dealing with them. The Second Conference of the Islamic Bank permitted Murabaha sales to a purchaser, provided that the commodity is owned and possessed by the bank first, and then sold at the agreed-upon profit, on condition that the bank bears the responsibility for any damage before delivery and the liability for returning the item due to a hidden defect.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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