The issue of installment sales and the clarification that it is one of the condemned ruses in the Shari'ah, and the relationship of this sale to riba.

The Shaykh : Now, among these ruses that have become a normal matter, to the point that if someone were to deny it, they would be denied in return; it is called today installment sales, and it is a very strong pillar for the aforementioned turning and revolving. If I go to the merchant now and want to buy a refrigerator or a car, I negotiate the price of this merchandise at two prices: the cash price and the installment price, and he sells it that way. I might buy it at the installment price, which is higher than the cash price, because I do not have money. Many of the Muslim scholars today permit this... based on this fatwa I mentioned to you regarding the Islamic bank. Instead of the merchant taking this increase for the installment sale, the Islamic bank, they claim, takes it in this manner. So these two thousand, instead of the merchant taking them, the bank takes them. Thus, his wealth expands through the path of trade, they claim, , and this sale, in their claim, is not riba.
This is based on the permissibility of installment sales; so what is the reality of this sale? Is it permissible or not? I say: it is permissible and not permissible, and there is no wonder in that; because whoever says it is permissible is holding an Islamic opinion, and whoever says it is not permissible is holding an Islamic opinion according to the view of those we referred to. So you take what pleases you; if prohibition suits you, you say it is prohibited, and if permissibility suits you, you say it is permissible, and it is all an Islamic opinion!! As for Islam, you have heard today in... the saying of Allah (Mighty and Majestic): ; what difference is greater than describing one thing with two contradictory descriptions? As if you are describing the time as day and night; one says: it is day, because he sees the light of day..., another says: no, it is night now, because he does not... This is correct and this is correct, two opposites that do not coexist!! This sticker is white and another says: it is black, both are correct! This means going out of reason, and worse than this is going out of the Shari'ah when you describe a specific issue with two contradictory descriptions, halal and haram, and then you... So what is the reality of installment sales... according to the text from which falsehood does not come from before it or from behind it?
I mention to you now two hadiths, and you may then choose whichever of the two opinions you wish, the ones called an Islamic opinion, they claim. Imam Ahmad narrated with his chain, a strong chain, from Abdullah ibn Mas'ud (may Allah be pleased with him), who said: "The Messenger of Allah (peace and blessings be upon him) prohibited two transactions in one transaction," and in another narration: "two sales in one sale." It was said to the narrator of the hadith, who was Sammak ibn Harb: "What are two sales in one sale?" He said: "That you say: I sell you this for such-and-such in cash, and for such-and-such on credit." This is installment sales: "I sell you this for such-and-such in cash," for a dirham in cash, "and for such-and-such on credit," for a dirham and a fils, for example. This is installment sales exactly.
The other hadith is narrated by Abu Bakr ibn Abi Shaybah in his Musannaf, and by Imam Abu Dawud in his Sunan with a good chain, from the hadith of Abu Hurayrah (may Allah be pleased with him), who said: The Messenger of Allah (peace and blessings be upon him) said: . Al-wakas is a reduction in weight and meaning. that is: the lower of the two prices... otherwise it is riba.
This riba was named by the Messenger (peace be upon him). Many people do not name it as such, but rather they say: this is a sale, and both the buyer on installments and the seller are satisfied, so they made that a justification for permitting this opinion. They have their ijtihad, but they said long ago: "When the athar arrives, the reasoning is invalidated," and "When the river of Allah arrives, the river of Ma'qil is invalidated." So when the hadith from the Messenger (peace and blessings be upon him) arrives, as the scholars of usul say: "There is no ijtihad in the place of the text."
Installment sales were adopted as a means to feed the treasury of the Islamic bank there in Abu Dhabi, as the person I referred to there in London told me. I was with one of our Egyptian-Saudi brothers, who was acquainted with the head of the bank there, the person in charge. So we immediately wrote a warning about this transaction, and we drew his attention to the fact that since you want to establish a truly Islamic bank, you must stay away from this transaction; because of the saying of the Messenger such-and-such, and his saying such-and-such and such-and-such, and so on.
So this is an example of what is schemed... in the name of installment sales and that it is permissible, so I say: were it not that...
So this is an example of what is schemed... in the name of installment sales and that it is permissible, so I say: were it not that the one in charge of this bank heard a fatwa permitting installment sales, he would not have permitted that operation, that he would come down as an intermediary between the buyer and the merchant, so instead of the merchant taking that increase, the bank takes it. He took that fatwa... but this fatwa was based on not paying any attention at all to the first hadith of Ibn Mas'ud, and to the other hadith of Abu Hurayrah; so this is an issue that admits... because it may occur to the mind of one who may be well-versed in some of the madhahib, some difficulties - also - which are answered, but we are dealing with it, except that I am taking it as an opportunity, so I say: installment sales have been and still are to this day a cause for Muslims to fall into a form of other prohibited transactions, and it is not the saying of him (peace and blessings be upon him): , Allah is the Greatest! This hadith is as if it is the revelation of the hour, , the most humiliated of people, we enslaved them and occupied some of our sacred lands, what humiliation is greater than this? This humiliation is from Allah , "" what your hands have earned "" and that Allah is not unjust to the servants , , what is the sale of 'inah?
'Inah is derived from the word 'ayn, and 'ayn has many meanings as is known to you, among its meanings is the essence, the essence of the thing, the very thing itself. So the Messenger (peace and blessings be upon him) applied this name to a specific transaction and called it the sale of 'inah. That is the installment sale we mentioned earlier, where after the buyer buys the need at an increased price on installments, exceeding the cash price, this buyer returns and has been paid - for example - twenty thousand, increased by two thousand, twenty-two thousand on him, if it is correct, by selling... for example, the buyer returns to the car as a seller and the seller to it as a buyer, and he says to the buyer of the car, which has not yet moved from its land: "Do you buy from me, so-and-so, this car in cash?" So they negotiate on it, and the merchant buys it from him for, for example, eighteen thousand... and the cash price in it must be capital less than that; so he went to buy it from him for less than the capital; meaning, instead of buying it from him, he would have bought it from the factory, for example. The bottom line is they agree - for example - on a price of eighteen thousand, and the merchant pays eighteen thousand in cash to this man, the merchant, they claim, and he departs, having been recorded as owing twenty thousand and increased... two thousand... the riba is four thousand. Perhaps no usurer among the Jews in the world gets like this, which they call interest, from such... they claim this is halal; why? My brother, !! But the prescribed sale.
There are sales that the Messenger of Allah (peace and blessings be upon him) forbade; for example, he said, "He forbade the sale of gharar (excessive uncertainty in a contract)." So... one does not know that people are trading with one another, but the important thing is to know the ruling of Islam in this matter: is it lawful or forbidden? "He forbade the sale of gharar"; therefore, the sale of gharar is not permissible. Likewise, he forbade installment sales, as you know. Likewise, he forbade the sale of 'inah (a buy-back sale used to disguise a loan), and He made it a cause for Allah (Mighty and Majestic) to impose humiliation upon those who deem the sale of 'inah permissible and who deem it permissible to compete greedily for this world, which He forbade in His saying (peace and blessings be upon him): and you leaned toward this world. And among the consequences of that was that you abandoned jihad in the cause of Allah. So what is the outcome of that? ; therefore, if the Islamic bank is established upon correct Islamic jurisprudence based on the Book and the Sunnah, then implementing it is obligatory; because it is a means to free Muslims from dealing with banks that do not distinguish between what is lawful and what is forbidden.