What is the ruling on taking a loan from a bank that involves purchasing a commodity (rice) from the bank, then the bank purchases it from a merchant, and the merchant contacts you to authorize him to sell it and deposit the amount into your account, or ship it to you?
This transaction is not a loan, and it could be a permissible or impermissible Tawarruq. Permissible Tawarruq is buying a commodity in installments or with a deferred price, then selling it for a cash price, with the possibility of authorizing the bank to sell it, as long as there is no compulsion. As for organized Tawarruq, it is impermissible due to the seller's obligation to act as an agent in selling the commodity and the violation of the conditions of possession. It is also possible that the bank sells the rice before taking possession of it from the merchant, and selling food before taking possession of it is unanimously prohibited. If taking possession of the rice and selling it is difficult, it is advisable to perform Tawarruq with a commodity that is easy to sell, such as a car.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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