Should a person who took out a loan in the name of his deceased brother repay the debt to the bank after the bank waived it for him?
It is permissible to obtain financing from a bank if it is a benevolent loan () or a permissible Tawarruq. It is forbidden if it is an interest-based loan (riba) or organized Tawarruq.
A person can obtain financing in another's name through three methods: 1. Loan (Qard): The person lends the money he obtained to his brother. For example, he buys shares on installments and then lends his brother a portion of their price, and the brother bears the remaining amount. 2. Sale (Bay'): The person buys an item on installments from the bank and then sells it to his brother for the same price, also on installments. The brother then sells it for cash and pays his installments to the seller, and the seller pays his installments to the bank. 3. Agency (): The brother appoints his sibling as an agent to buy shares or a car and pay the installments to the bank. It is not required to explicitly mention the name of the principal in the sale and purchase contracts.
If the intermediary who dealt with the bank dies, and the bank waives the installments for him, these installments are not waived for the principal, who is the original party to the transaction. The principal is still obligated to pay the installments to the bank.
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