Is it permissible to deal with a banking institution through a Murabaha contract to acquire a house for residence, knowing that their definition of Murabaha is financing a product that the institution buys and sells to the customer with a pre-agreed profit margin, and the amount is paid in installments, and the profit margin constitutes a مقابلًا (consideration) for services and expenses and cannot be increased?

If the interest-based banking institution has established a branch that operates according to Sharia principles, there is no objection to dealing with it, provided that its transactions comply with the rulings of Islamic law, and that its investment channels are completely separate from the parent interest-based institution, and that it is not merely a facade to attract funds. However, if this branch does not adhere to the rulings of Islamic law, then it is not permissible to deal with it.

Regarding the mentioned transaction, which is installment selling, it is permissible if the institution purchases the commodity and it enters into its possession and guarantee, and then sells it to the customer at a higher price, provided that it does not stipulate a penalty for late payment, and it is not required that the profit margin be in exchange for banking services.

However, if the buyer does not want the commodity itself but rather wants to benefit from its price, this is what is called Tawarruq, and it is permissible.