The Ruling on Dealing with Banks in Installment Transactions
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Question:
The questioner says: Honorable Shaykh, most banks engage in installment transactions, and they claim to have a fatwa from some of the shaykhs. Is it permissible for a person to deal with them? And is he required to verify that what the bank sells to him is actually the property of the bank, or is it sufficient to rely on their statement? May Allah bless you.
Answer:
We have no knowledge of bank transactions, but what is clear, and what the banks are, is that they are riba (usury or interest) institutions. This is a known fact when they deal in riba.
Their economy is based on riba, because they are like the world’s banks; their system is the system of the world’s banks, and the world’s banks do not, do not operate except on the basis of riba. So what makes these banks free from riba? They follow the system of the other banks and do not deviate from it in any way. Dealing with them: they do not have goods to sell. Rather, when a customer comes, they send him to the goods owners, the companies, the showrooms, or the merchants, saying, “Look for what suits you.” Or they send him to the land owners, saying, “Look for what suits you.” They know its value, and we will deliver it for you. They did not buy it from them; they bought it for the customer. They deliver its value, land, to the customer with an increase. This is riba money. If they were truthful and wanted the truth, they would have the goods in their possession, in their warehouses, and in their storage facilities. Then, when the customer comes, they would sell him a good, deliver it to him, and record its price as a deferred debt in his liability. But this is not what they have. They have nothing of the goods. They are lying. They send people to other people’s goods, other people’s properties, and they are merely an intermediary.
And the one who buys the good did not buy it from them; they bought it for the customer. They deliver its value, land, to the customer, and they take an increase on it. This is what they are doing. And whether they have a fatwa or they do not have a fatwa, this does not concern us. A fatwa may err or be correct. Perhaps they confused the one who issued the fatwa for them; they confused him and he believed them without looking into their dealings and knowing the reality of their dealings.
The presenter:
May Allah reward you.
The questioner says: Honorable Shaykh, most banks engage in installment transactions, and they claim to have a fatwa from some of the shaykhs. Is it permissible for a person to deal with them? And is he required to verify that what the bank sells to him is actually the property of the bank, or is it sufficient to rely on their statement? May Allah bless you.
Answer:
We have no knowledge of bank transactions, but what is clear, and what the banks are, is that they are riba (usury or interest) institutions. This is a known fact when they deal in riba.
Their economy is based on riba, because they are like the world’s banks; their system is the system of the world’s banks, and the world’s banks do not, do not operate except on the basis of riba. So what makes these banks free from riba? They follow the system of the other banks and do not deviate from it in any way. Dealing with them: they do not have goods to sell. Rather, when a customer comes, they send him to the goods owners, the companies, the showrooms, or the merchants, saying, “Look for what suits you.” Or they send him to the land owners, saying, “Look for what suits you.” They know its value, and we will deliver it for you. They did not buy it from them; they bought it for the customer. They deliver its value, land, to the customer with an increase. This is riba money. If they were truthful and wanted the truth, they would have the goods in their possession, in their warehouses, and in their storage facilities. Then, when the customer comes, they would sell him a good, deliver it to him, and record its price as a deferred debt in his liability. But this is not what they have. They have nothing of the goods. They are lying. They send people to other people’s goods, other people’s properties, and they are merely an intermediary.
And the one who buys the good did not buy it from them; they bought it for the customer. They deliver its value, land, to the customer, and they take an increase on it. This is what they are doing. And whether they have a fatwa or they do not have a fatwa, this does not concern us. A fatwa may err or be correct. Perhaps they confused the one who issued the fatwa for them; they confused him and he believed them without looking into their dealings and knowing the reality of their dealings.
The presenter:
May Allah reward you.
Source
قناة «العلامة الدكتور صالح الفوزان»، محاضرات في العقيدة والدعوة-099-نواقض الإسلام|صالح الفوزان|كبار العلماء — youtube.com (1:17:28)
The Arabic text is a machine transcription of the audio recording.