Discussion on the ruling of tawarruq, along with a continuation of the discussion on some transactions resembling those of the Islamic Bank.

The questioner : I recall that I studied in a time when I remember studying a fiqh issue, which is tawarruq?

The Shaykh : It is among the branches of this issue.

The questioner : They said that this is...

The Shaykh : Permissible in that country, and they are still living there.

The questioner : I know the country.

The Shaykh : And I did not study there for three years.

The questioner : It is not permissible.

The Shaykh : It is not permissible.

The questioner : The text I just mentioned that the doctors and scholars of the Islamic Bank relied on, saying that this is permissible, they based it on the hadith I just mentioned: "Two sales in one sale." The word of one is valid, not two. Is that what it means?

The Shaykh : Meaning they took the apparent meaning of the hadith. Do you see how?

The questioner : According to this school of thought.

The Shaykh : Yes, what was I going to say on this occasion? You just reminded me, or you almost reminded me. Yes, I reminded you earlier that some scholars who resorted to legal stratagems said that it is one sale. We mentioned this earlier. Now, what I want to mention is the prohibition of the Messenger (peace and blessings be upon him) in the first hadith of two sales in one sale. They questioned themselves: what is the 'illah (operative cause)? They wanted an 'illah from their own opinion and turned away from the 'illah explicitly stated in the second hadith. They brought an 'illah from their own opinion. If the first hadith did not exist, the 'illah they are talking about would be rejected. Why? Listen to what they say? Now, let us temporarily remove from our minds because some people might find this hadith difficult. We will temporarily relieve them of it. And this is stronger for us, is it not?

The questioner : Of course.

The Shaykh One of them asks: What is the 'illah in this prohibition? They said, and they insisted on it, and the later scholars relied on it. They said the 'illah is the ambiguity of the price. Look, how this opinion collapses when you consider reality. What do they mean by the ambiguity of the price? When a merchant offers one item at two prices: cash at such-and-such, and credit at such-and-such. Here there is ambiguity: which price did the buyer rely on? It is unknown, because it could be the cash price or it could be the installment price. I am amazed that scholars like that scholar who said, "If there is urine in a vessel, then you pour the urine from that vessel into water, this is permissible," but in reality, he has no motive for that. Similarly, I am amazed how this group says "ambiguity of the price" when reality refutes this claim. Why? Because this man who bought from the merchant and left will leave in his state or at one of the two prices. If he paid cash, it is very clear that he bought for cash, there is no ambiguity. If he did not pay cash, there is ambiguity that he did not pay cash. So if he bought on credit, and we take the issue superficially regarding the old days when people had purity and trust, as our brother said earlier, "If someone he trusts comes to him," etc. But today, there must be a condition. Do you see how? So this person who bought on installments and took a document stating that he must pay such-and-such every month or every two months according to the agreement, how can it be said that they separated with ambiguity of the price? This is stubbornness and denial of reality. Therefore, we say that interpreting the hadith in this way is refuted by reality and invalidated by it, because reality testifies that the buyer separates with one of the two prices, such that no doubt remains with the seller, let alone the buyer, that he bought for cash or on installments. Is this correct? When you realize with me, no doubt remains, there is no ambiguity. So when we know the answer and stand by this hadith, then we return to the hadith. This is the 'illah, and what is this? The Shari'ah supports it. The first scenario we mentioned regarding the Islamic Bank is very clear. The second scenario, which is much clearer: I want to buy a car and I do not have its value. I go to a rich man and say, "Lend me ten thousand." He will not lend me for one reason or another. The Islamic Bank says, "Okay, lend me ten thousand and I will give you ten thousand and one hundred." No, this is haram, this is riba. So what should I do? I am a worker, I want to work and do such-and-such. Okay, go to the company and choose the car, and I will pay you its price. What is the difference between the two scenarios? It is purely formal. So it is a stratagem to consume the wealth of people unjustly. And this is the transactions of the Islamic Bank. Many of our brothers went and agreed with them that they would procure a machine from Europe at a price, on the basis that payment would be after six months. Okay, and if I can pay after six months, or after a year, they said, "This transaction is riba." Is that correct or not? May Allah have mercy on you.

The questioner : ... In a second point, it may be for the other person who bought this merchandise through the fact that he incurred compound interest. The first interest is the profit of the merchant in the Islamic Bank. The other interest is what the Islamic Bank profited from. So this knowledge is with Allah, without a doubt, that this is a type of riba.

The Shaykh : Then, study the reality of these transactions. You must have heard, as many people have heard, that they bought houses and apartments in this way. Then Allah struck them with a blow, a severe blow, and they were forced to sell the house they bought, for example, for twenty, selling it to the bank itself for much less than they bought it, by multiples. Have you heard this? This is Allah's war against these people, a war that these people do not feel because of their heedlessness and their distance from the Shari'ah of their Lord. We ask Allah for protection.
Abu Layla : Sometimes, Shaykh, some merchants buy through the bank, but they take the merchandise and sell it for less than they bought it.

The Shaykh : This is 'inah. 'inah happens in your country, there.

The questioner : Regarding the Shaykh, for letters of credit, merchants are forced, like letters of credit, and as you mentioned earlier, of course, it falls under the category of... formalities and it is haram. Are merchants forbidden from dealing in any transaction except by letter of credit? And there must be riba in it.