What is the Shariah ruling on the Saudi bank settling a debt on my behalf to Al-Rajhi Bank in exchange for transferring my salary and taking out a new loan with a commodity, repaying its value in installments, given that the interest at the Saudi bank is lower, and the remaining amount to Al-Rajhi is 111,000, while the Saudi bank allows 190,000, from which 111,000 will be paid and the remainder received to pay off debts to individuals, provided that the installments are paid to the Saudi bank?
There is no objection to settling a previous Tawarruq debt with a new Tawarruq from another Islamic bank, provided that the Shariah controls for Tawarruq are observed. There is no harm in transferring one's salary to the second bank if that is a condition for performing the Tawarruq. It is permissible for the first bank to waive a portion of the debt upon accelerated settlement, provided that this was not a pre-condition.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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