Clarification of the issue of tawarruq and whether it is a means of circumventing riba
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The questioner:
Honorable Shaykh, may Allah grant you success. This questioner says: A group of scholars have permitted tawarruq (a commodity sale used to obtain cash) because it provides ease for people, despite the fact that it is a means of circumventing riba (usury or interest). What is the stronger position on this issue?
The Shaykh:
Tawarruq does not involve riba, my brother. There is no riba in it, nor is it a means of circumventing riba. It is done out of need, out of need. You need dirhams and you do not lie, except that you buy a commodity from a person for a deferred price, then you sell it to someone else for a spot price to meet your need. When the term comes due, you pay the creditor. There is no harm in this, even though some scholars have prohibited it. However, the majority and the preponderant view is that it is permissible, the permissibility of the issue of tawarruq, which people call "al-daynah," or some of them call it "al-gha'ibah," or something similar. Yes.
The presenter:
Honorable Shaykh.
The Shaykh:
Through tawarruq, because the intention behind it is to obtain paper money, which is silver. Yes.
Honorable Shaykh, may Allah grant you success. This questioner says: A group of scholars have permitted tawarruq (a commodity sale used to obtain cash) because it provides ease for people, despite the fact that it is a means of circumventing riba (usury or interest). What is the stronger position on this issue?
The Shaykh:
Tawarruq does not involve riba, my brother. There is no riba in it, nor is it a means of circumventing riba. It is done out of need, out of need. You need dirhams and you do not lie, except that you buy a commodity from a person for a deferred price, then you sell it to someone else for a spot price to meet your need. When the term comes due, you pay the creditor. There is no harm in this, even though some scholars have prohibited it. However, the majority and the preponderant view is that it is permissible, the permissibility of the issue of tawarruq, which people call "al-daynah," or some of them call it "al-gha'ibah," or something similar. Yes.
The presenter:
Honorable Shaykh.
The Shaykh:
Through tawarruq, because the intention behind it is to obtain paper money, which is silver. Yes.
Source
شرح إغاثة اللهفان من مصائد الشيطان لابن القيم، بداية من : الوجه الثامن : أن النبي - صلى الله عليه وسلم - قال : إنما الأعمال بالنيات وإنما لكل امرىء ما نوى — islamhouse.com (48:17)
The Arabic text is a machine transcription of the audio recording.