The Shaykh was asked about one of the transactions of installment sales, with an explanation of the form of the *mudarabah* sale.

The questioner : The form of the banks that are called Islamic banks, they call it *mudarabah*. This is the form: a man goes to the bank and says, "I want a car." The bank buys the car for him and sells it to him on installments...?

The Shaykh : No, it has no relation to *mudarabah*. This is one of the forms they have, but it has no relation to the so-called *mudarabah* they have. Now, continue.

The questioner : In any case, this exists. They sell it to him on installments, and he pays the first installment. But the point is that the bank conditions that if he does not take it, they do not obligate him to take it, and they sell it to someone else. But if they incur a loss on it, he bears the loss. If they sell it at its price, they do not want anything from him. We want to know the permissibility of this sale?

The Shaykh : Where is this found? This is not found with us.

The questioner : It is found with us at the Qatar Islamic Bank.

The Shaykh : At the Qatar Islamic Bank, this is new.

The questioner: ThisThe Shaykh : Ali al-Salouh is the one in charge of this, and he permitted them this form.

The Shaykh : This has no relation to *mudarabah*. I mean, this is a sale on installments.

The questioner : But it is based on the bank, meaning the bank does not have this commodity, or the cars, or such. Rather, the man wants to buy the car from abroad, for example, for fifty thousand, and he does not have the amount...

The Shaykh : May Allah reward you for knowing that *mudarabah* is when a person gives money to a man and says to him, "Work with these funds," and the profit is shared one-third, half, one-fourth, and so on. If there is a profit, he gets what they agreed upon. If there is a loss, he gets nothing. And conversely, his money is lost and that man’s effort is lost. That is *mudarabah*.

The questioner : The problem is that they call it this; they call it *mudarabah*.

The Shaykh : If they call it by a name other than its true name, that is problematic. In fact, the form you presented now is the first time I am hearing it.The questioner:...

The Shaykh : In any case, the issue of the name is not important. What is important is the reality. Repeat the form for me. How is it?

The questioner : The form is that he goes to the car company first and identifies the car first, for example, for fifty thousand cash. Then he goes to the bank and says to him, "I want to buy a car of such a make or such a type, and it is abroad for fifty thousand cash." He says to him, "I want you to buy it for me, and I have given you the amount on installments." So he writes a contract between them. This is what reached me from several brothers. He writes for him a preliminary contract, they call it approximately, and the bank goes and buys it for him. He says to him, "If you do not take this car, we do not obligate you to take it, but we sell it to someone else. If we do not lose any money, you compensate us for it, because you have now allocated this amount for you, and we would not have bought this car except for you. If we do not lose anything from it, you are done with your matter."

The Shaykh : There is a point here. Because on the surface, based on what I heard initially, I say it is permissible. But there is a point that is not clarified in your speech. You said he goes to the company. The company, for example, the car he chose requires fifty thousand cash from him, for example. Now, does the bank take the same price from him? Or does it take more from him?

The questioner : It takes more.

The Shaykh : Ah, then it returns to the issue of installment sales. We do not permit installment sales.

The questioner : This is known, but we are talking about...

The Shaykh : No, allow me. What is built upon a defective foundation is defective. Therefore, I do not want to tell you it is permissible, because if I tell you it is permissible, it means I have ruled that the transaction is permissible.

The questioner : Well, it is a known point, praise be to Allah, your opinion on the issue of installments. But I wanted to look at the form...

The Shaykh : My brother, I understood what you mean. But if I tell you it is permissible without drawing your attention to the fact that installment sales are not permissible, what benefit have I or you gained? We benefit those who deal in a transaction of the types of *riba* transactions, which is exploiting the need of the needy and controlling the price, that installments are not the cash price, as they say here.

The questioner : Well, Shaykh, the issue of *tawarruq* is also famous there.

Another questioner : In fact, regarding the brother’s question about the bank, he did not clarify it.The questioner : The Islamic bank, if it wants to buy goods for a customer, it asks him to bring an invoice at the cash price, as you mentioned and clarified for them. But there is another matter that our brother did not mention, which he may not know. It is that when the bank knows the cash price in that place, it asks the customer to specify to the bank the time period during which he wishes to pay the amount. If it is in one year, the profit is seven percent. If it is in two years, the profit is fourteen percent, and so on. And if an agreement is reached between the two parties, there is another clause that the Islamic bank conditions on him, which is that he signs a sale-purchase contract between him and the Islamic bank before the Islamic bank possesses the car from the customer, who is from the first merchant. I mean, here the Islamic bank sold a commodity it does not own to a customer before buying it from the merchant. This clarification is what I wanted to explain.The questioner : May Allah reward you with good. This is in fact the reality. But our brother Walid here assumed a form and wanted an answer to it, regardless of its details. But if we asked him, "Is what you described about the Islamic bank here the reality there?" he might go and tell you, "I do not know." Or he might say, "No, it is not like that there." Every question has an answer. He asked this question, and we drew his attention to the fact that the basis of the question is built upon something not permissible. And installment sales, and the details you mentioned here, undoubtedly confirm the impermissibility of this sale and this contract. But do you have an answer to this question?

The Shaykh : May Allah reward you. This is, in fact, the reality, but our brother Al-Walid here posed a hypothetical scenario regarding the answer to it, regardless of its implications. However, if we were to ask him whether what he described about the Islamic bank here is actually the case there, he might say, "I don't know," or he might say, "No, it is not like that there." Every question has an answer. He asked this question, and we drew his attention to the fact that the basis of the question is built upon something that is not permissible. The installment sale and the details you mentioned here undoubtedly confirm the impermissibility of this sale and this contract. But do you have an answer to this question?

The questioner : No, no, I don't know.

The Shaykh : That is it.

Another questioner : Another explanation coming from Qatar, our brother Abu Abdullah. In fact, based on the fatwas I heard from your eminence and other of our Muslim brothers who said that this sale is *haram*, one of the clauses they mentioned is that the promise to purchase is not binding. Whether the Islamic bank in Qatar wants to get rid of this form or not, they said the promise to purchase is not binding, but we charge the customer with the loss if the goods are sold to someone else...

The questioner : The same commodity, the same car, cash for fifty thousand. The bank bought it, meaning for the bank, because it buys many cars, so it buys at a cheaper price and sells it for fifty thousand to this same man. Is this form permissible? I mean, if the man...?

The Shaykh : I understood, I understood. You are going to know that I understood or not. When I face the next question to you and you answer it, we are dealing with the previous form where the car agency sells the car, such a model, for fifty thousand cash. I asked you before: does the bank sell for fifty thousand on installments? You said no. Now the question and the topic have developed, and the answer has developed. You said no, the bank sells on installments at the same price that the agency sells for cash.

The questioner : I assumed the other scenario.

The Shaykh : Excuse me, now you said this. I did not say anything else to you. Now you said this. This form is actually imaginary. I am not interested in verification now. But this form is not that one. Now I am asking you about this form, whether it is imaginary or real. If it is real...