Is the transaction that involves the bank's purchase of a metal and its sale to the client in installments, followed by the bank's sale of the metal to another company and giving the client a check in the name of the sonar company, permissible in Islamic law for purchasing a sonar device?

Organized Tawarruq is a matter of dispute among contemporary scholars, most of whom consider it impermissible. The Islamic Fiqh Academy issued a resolution prohibiting it in its seventeenth session.

The Academy describes organized Tawarruq as: "A systematic operation carried out by a bank in which a commodity is arranged to be sold... to the mustawriq at a deferred price, provided that the bank undertakes... to act on his behalf in selling it to another buyer at a cash price, and handing over its price to the mustawriq."

The Academy ruled it impermissible for the following reasons: 1. The seller's commitment to act as an agent in selling the commodity to another buyer makes it similar to the legally prohibited 'inah (buy-back) transaction. 2. This transaction often leads to a breach of the conditions of a legitimate physical possession (qabd). 3. The reality of this transaction is based on the bank granting cash financing with an increment, and these are mostly sham transactions.

The Academy differentiates between organized tawarruq and legitimate real tawarruq. Real tawarruq is based on a real purchase of a commodity at a deferred price, which enters into the ownership of the buyer and is genuinely possessed by him. The Academy advises banks to avoid prohibited transactions and to use legitimate real transactions.