What is the ruling on taking a loan from a bank that grants the client ownership of goods which he does not see, then the client authorizes the bank to sell them, and the client obtains the money and repays it in installments?
The mentioned form of Tawarruq is forbidden (organized Tawarruq). The permissible form is for you to buy a commodity owned by the bank, then sell it yourself without appointing the bank as your agent for the sale. If disposing of the commodity is difficult, one can buy a car in installments and sell it to another party for cash. This is the permissible Tawarruq.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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