What is the ruling on personal Murabaha with a bank (Islamic branch), which is conducted by the bank purchasing metals at the requested price and selling them to the client at a deferred price with an agreed-upon profit margin (10% annually), knowing that the client does not see or possess the metals, but rather the bank is authorized to sell them, and the funds are placed in his account to purchase a car?

Organized Tawarruq, which some banks engage in, involves the bank selling a commodity to the mustawriq (the one seeking financing) for a deferred price. The bank then undertakes to sell it on his behalf to another buyer for an immediate price and hand over its value to the mustawriq. The Islamic Fiqh Academy has issued a resolution prohibiting this type of tawarruq 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 'inah (buy-back) transaction, which is forbidden by Sharia. 2. This transaction often leads to a violation of the conditions for valid Sharia-compliant possession (qabd). 3. This transaction is based on providing cash financing with an increment, and the buying and selling transactions involved are mostly fictitious.

This differs from permissible real tawarruq, in which a genuine purchase of a commodity takes place for a deferred price. The commodity enters the ownership of the buyer, who takes real possession of it, and then he sells it for an immediate price due to his need.

The Academy recommends avoiding prohibited transactions and resorting to genuine, legitimate transactions.

The fatwa issued (the prevailing legal opinion) is to prohibit this transaction. It is permissible for the bank to buy a car and sell it for a profit. If the bank refuses to do so, one can seek another Islamic bank that accepts the transaction, away from organized tawarruq.