Selling a bill of exchange to the bank
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The first question of Fatwa No. ( 2923 )
Q1: A man purchased goods from a seller, and they agreed on a term for payment of one or two months. The buyer signed a document called a "bill of exchange" specifying the purchase price, the time of payment, and the buyer's name. Afterwards, the seller sells the bill of exchange to the bank, and the bank pays the value of the (bill of exchange) in exchange for a profit it takes from the seller. Is this lawful or forbidden?
A1 : Purchasing goods for a known term at a known price is permissible, and writing down the price is required by the Shari'ah; due to the generality of the statement of Allah the Exalted:[Al-Baqarah 2:282] the verse. As for selling the bill of exchange to the bank with interest that the seller pays to the bank in exchange for the bank paying the amount to the seller, and the bank taking charge of collecting what is in the bill of exchange from the buyer of the goods - it is forbidden; because it is riba. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q1: A man purchased goods from a seller, and they agreed on a term for payment of one or two months. The buyer signed a document called a "bill of exchange" specifying the purchase price, the time of payment, and the buyer's name. Afterwards, the seller sells the bill of exchange to the bank, and the bank pays the value of the (bill of exchange) in exchange for a profit it takes from the seller. Is this lawful or forbidden?
A1 : Purchasing goods for a known term at a known price is permissible, and writing down the price is required by the Shari'ah; due to the generality of the statement of Allah the Exalted:
O you who have believed, when you contract a debt for a specified term, write it down.
يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنْتُمْ بِدَيْنٍ إِلَى أَجَلٍ مُسَمًّى فَاكْتُبُوهُ
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.