What is the ruling on a personal loan from the Saudi National Bank that relies on buying rice from Al-Muhaidib and selling it back to Al-Muhaidib or to another merchant at a discounted price, given that the borrower did not see the commodity, and the bank's interest is 1.99%?

If the bank buys rice for itself, takes possession of it, and then sells it to the ordering party at a price they agree upon, there is no harm in that, and the bank's profit is permissible. If the ordering party owns the rice and takes possession of it, there is no harm in them selling it to benefit from its price (Tawarraq). It is preferable to sell it to someone other than the initial seller to avoid the شبهة العينة (suspicion of 'Inah transaction). The commodity must be taken possession of by the bank before it sells it to the ordering party, and by the ordering party before they sell it to someone else, because it is food, and due to the Prophet's (peace be upon him) saying: "Whoever buys food should not sell it until he takes possession of it." However, it must be noted that many of these typical bank transactions have become merely superficial and do not fulfill the conditions of permissible Tawarraq. Therefore, a Muslim should be wary of dealing with them.