What is the ruling on dealing with the Real Estate Development Bank, which buys the government's money with cash on hand?
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The questioner : Shaykh, may Allah reward you with good. In some banks, a person applies for a construction loan from the state. They give him three hundred thousand in full, then ask him to repay it over a period of twenty-five years. They also pay the bank two hundred and ten thousand, so they profit ninety thousand, while the borrower repays them the full three hundred thousand. His benefit is that instead of waiting ten, seven, or eight years or more to apply, they give it to him now. As for them, they benefit from the amount. Is this permissible?
The Shaykh : This is not permissible. That is, it is not permissible for the bank to buy the money that is with the government with cash on hand. The scenario is that a person has a name on the list with the government in the Real Estate Development Fund, and his loan is delayed. The person comes to the bank and says, "This is my name with the government; they have approved the loan. Give me now such and such amount of money, less than what the government gives, and I will assign you to the government." The bank does this. We say: This is not permissible, because it is selling money for money with an excess, and selling what one does not own, because the person does not own what is with the government. The government may give it to him or may not, and it is also ambiguous. This transaction is forbidden, and it is obligatory for the person, if he applies to the bank and his name is listed, to wait until Allah makes the matter easy.
The Shaykh : This is not permissible. That is, it is not permissible for the bank to buy the money that is with the government with cash on hand. The scenario is that a person has a name on the list with the government in the Real Estate Development Fund, and his loan is delayed. The person comes to the bank and says, "This is my name with the government; they have approved the loan. Give me now such and such amount of money, less than what the government gives, and I will assign you to the government." The bank does this. We say: This is not permissible, because it is selling money for money with an excess, and selling what one does not own, because the person does not own what is with the government. The government may give it to him or may not, and it is also ambiguous. This transaction is forbidden, and it is obligatory for the person, if he applies to the bank and his name is listed, to wait until Allah makes the matter easy.