Forms of Borrowing from the Agricultural Bank
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The second question of Fatwa No. ( 1397 )
Q2: Many people buy sheep to borrow from the Agricultural Development Bank; they take sheep that are priced, for example, at three hundred or four hundred riyals per party, and the bank records it as a loan without rearing or profit. Also, the person buying from the bank brings his own sheep that he previously possessed and tells the bank: these are sheep I bought from the market at your set price, so that he can obtain the amount he wants to borrow under this description. What is the ruling?
A2: If a person buys sheep for the purpose of rearing and brings them to the bank, stating the purchase price truthfully, and the bank gives him the value as a loan without profit, this is permissible and contains no doubt. However, if it involves profit, it is not permissible, because it is a loan that yields benefit. As for the person who brings sheep he previously possessed and tells the bank: these are sheep I bought from the market at your set price, so that he can obtain the amount he wants to borrow, this is a lie that a person must not engage in. He should fear Allah and be mindful of Him in this matter.
And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q2: Many people buy sheep to borrow from the Agricultural Development Bank; they take sheep that are priced, for example, at three hundred or four hundred riyals per party, and the bank records it as a loan without rearing or profit. Also, the person buying from the bank brings his own sheep that he previously possessed and tells the bank: these are sheep I bought from the market at your set price, so that he can obtain the amount he wants to borrow under this description. What is the ruling?
A2: If a person buys sheep for the purpose of rearing and brings them to the bank, stating the purchase price truthfully, and the bank gives him the value as a loan without profit, this is permissible and contains no doubt. However, if it involves profit, it is not permissible, because it is a loan that yields benefit. As for the person who brings sheep he previously possessed and tells the bank: these are sheep I bought from the market at your set price, so that he can obtain the amount he wants to borrow, this is a lie that a person must not engage in. He should fear Allah and be mindful of Him in this matter.
And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.