A loan conditioned by a loan
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Q: For example, we take ten kilograms of gold, worth one million riyals, and give him one million and fifty thousand, which is a five percent increase over the value, as a current account. If the price of gold increases, we pay him the amount of the increase, and if the gold decreases, he pays us the amount of the decrease. He disposes of the money, and we dispose of the gold. The gold remains with us for him, and the money is with him for us. If he asks for his gold, or we ask for our money, we return his gold to him, and he returns our money to us. Is this permissible? Please inform us.
A: This transaction is not permissible; because this is a loan conditioned by another loan, so it is a matter of "I lend you and you lend me," where each one benefits from the currency he delivered to the other and returns its equivalent to him upon request, while bearing the difference in price. This transaction is forbidden; because every loan that entails a benefit is forbidden by the consensus of the scholars. Also, this transaction contains a condition of a contract within a contract, so it is of the two sales in one sale, which is prohibited. It was established from the Prophet (peace and blessings be upon him) that heMuwatta Malik 31:74, narrated by Abu Dawud and al-Tirmidhi, and he said: A good, authentic hadith.
A: This transaction is not permissible; because this is a loan conditioned by another loan, so it is a matter of "I lend you and you lend me," where each one benefits from the currency he delivered to the other and returns its equivalent to him upon request, while bearing the difference in price. This transaction is forbidden; because every loan that entails a benefit is forbidden by the consensus of the scholars. Also, this transaction contains a condition of a contract within a contract, so it is of the two sales in one sale, which is prohibited. It was established from the Prophet (peace and blessings be upon him) that he
forbade two sales in one sale
نهى عن بيعتين في بيعة
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.