Is purchasing a car or electrical appliances in installments through the bank, where the bank pays the seller and the buyer repays the bank with a specified increase, considered usurious?
If the bank pays the remaining price of the car to the dealership and then collects it from the buyer in installments with an increase, this is usury (riba) and is not permissible, because the bank has lent to the buyer and taken interest on the loan. It is not permissible to deal with the bank in this manner. Instead, the Shariah controls for Tawarruq (monetization) or (cost-plus financing) must be observed. Your brother is not permitted to start a private project based on this forbidden transaction, as Allah Almighty says: "And cooperate in righteousness and piety, but do not cooperate in sin and aggression. And fear Allah; indeed, Allah is severe in penalty" (Al-Ma'idah: 2).
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/186409
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 186409
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy