What is the ruling on obtaining a loan to build a house from a bank that operates on the basis of Tawaruq, where the client buys a commodity from the bank and then sells it at a lower price to obtain money?
If the goods are owned by the bank, there is no objection to purchasing them from the bank in installments, provided that no penalty is imposed for late payment. It is also stipulated that it should not be an organized tawarruq, as the seller's commitment to act as an agent in selling the commodity to another buyer or arranging for someone to buy it makes it similar to the prohibited bay' al-inah (buy-back sale). Therefore, it is preferable not to authorize the bank to sell the commodity if it is possible to receive and sell it personally; otherwise, the transaction falls under the prohibited organized tawarruq.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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