What is the ruling on agreeing with a supplier to open a fictitious letter of credit with the bank, where a fictitious invoice is issued and the bank demands the amount from the company, with payment deferred for 6 months and a murabaha paid for that period, without there being any real goods, in exchange for the company receiving a commission from the supplier for financing him from the bank?
This transaction is impermissible, due to the forbidden trickery, deception, and fraud it entails. It is a circumvention to obtain an interest-based loan between the company and the bank, and between the company and the supplier. Borrowing and lending with interest are forbidden and are among the gravest of sins.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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