What is the ruling on borrowing money from the National Bank through selling a commodity—such as iron—to me, then selling it back to me again with a 10% increase, provided that the amount is repaid in monthly installments over a period of not less than 5 years?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
If the bank purchases a commodity and sells it to another person before it comes into its possession, and the aim is to pay a sum with interest, rather than to sell the commodity itself, then this is impermissible because it is a loan that yields a benefit, which is forbidden interest (riba). However, if the bank purchases the commodity and sells it to the inquirer with a profit, then this is a permissible sale.
Summarized from the full answer at Ftawy · imported
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- 39482
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