An example of deceptive riba (the sale of 'inah).
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The Shaykh : An example of this is: I sell you a car for fifty thousand, with the price due in one year. If it were sold for cash—and people call this "kash," which appears to be a foreign word to me, so if any of you knows its origin in the Arabic language, let him bring it—
The student: ...
The Shaykh : Otherwise, leave out "kash" and say "cash." The point is, this car is sold for a period of one year for how much? Fifty thousand riyals, while it is worth forty thousand riyals in cash. The man bought it, took it, and left. So, how much is established in the buyer's liability to the seller? Fifty thousand riyals. Then the seller went to him and said, "Give it to me for forty thousand in cash. Take forty thousand." So he gave him the car. What happened now? First, the seller of the car gained ten thousand riyals in riba. But instead of saying, "This is forty thousand riyals in cash, so you give me fifty thousand riyals after a year," instead of saying it that way, he made the car an intermediary. For this reason, Ibn 'Abbas (may Allah be pleased with him and his father) said: "It is dirhams for dirhams, with a garment entering between them", meaning a garment. And here we say, dirhams for dirhams, with what entering between them?
The student: A car.
The Shaykh : A car. This is the trick, this is the trick. It is forbidden. The Messenger of Allah (peace and blessings be upon him) warned against it, saying: This is a severe warning. But many people fall into such tricks, even if it is not in that exact form, it is in the meaning of that form. So it is now clear that transactions revolve around three things. The forbidden among them revolves around three things: first, oppression; second, gambling; and third, riba. If you wish, you can say that riba is a type of oppression, as Allah the Exalted said: [Al-Baqarah 2:279]
The student: ...
The Shaykh : Otherwise, leave out "kash" and say "cash." The point is, this car is sold for a period of one year for how much? Fifty thousand riyals, while it is worth forty thousand riyals in cash. The man bought it, took it, and left. So, how much is established in the buyer's liability to the seller? Fifty thousand riyals. Then the seller went to him and said, "Give it to me for forty thousand in cash. Take forty thousand." So he gave him the car. What happened now? First, the seller of the car gained ten thousand riyals in riba. But instead of saying, "This is forty thousand riyals in cash, so you give me fifty thousand riyals after a year," instead of saying it that way, he made the car an intermediary. For this reason, Ibn 'Abbas (may Allah be pleased with him and his father) said: "It is dirhams for dirhams, with a garment entering between them", meaning a garment. And here we say, dirhams for dirhams, with what entering between them?
The student: A car.
The Shaykh : A car. This is the trick, this is the trick. It is forbidden. The Messenger of Allah (peace and blessings be upon him) warned against it, saying: