What is the ruling on buying a car from the Palestine Islamic Bank, where the bank buys and owns the car, then sells it to me in installments with a known profit without an increase for late payment? Is this permissible or a usurious loan?
For the bank's sale of the car to be permissible after purchasing it from the car company, the bank must take lawful possession of it. This possession varies according to custom. The Hanafis held that takhliyah (removing impediments and enabling possession) is considered constructive possession. If the bank possesses the car, whether actually or constructively, it is permissible for it to sell it to the prospective buyer. It is not a condition for the car to be registered in the bank's name or for the price to be paid before the contract with the prospective buyer. The bank must bear responsibility for the car before delivering it to the buyer.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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