What is the ruling on one who goes to a development bank and says, “I want to buy such-and-such a car from the showroom,” so the bank buys it in its own name and then sells it to this man?
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The Shaykh : Come on, my brother.
The questioner : Shaykh, may Allah reward you with good. I found an advertisement in Kuwait.
The Shaykh : What is it?
The questioner : An advertisement, an advertisement.
The Shaykh : An advertisement.
The questioner : About a loan, specifically providing a loan in installments, meaning paying it off in installments. It is, well, a person buys a car from a financing house, then transfers the car to my name, then he pays the financing house in installments, and then I transfer it to his name, or...
The Shaykh : I mean, for example, he goes to the financing house and says, “I want such-and-such a car,” so the financing house buys it from the showroom?
The questioner : It buys it in its own name.
The Shaykh : In its own name and pays the price, then sells it to this applicant for more than the price, in installments, yes?
The questioner : Yes.
The Shaykh : This is a ruse to circumvent riba (usury or interest). I mean: instead of saying, “Take fifty thousand riyals, the value of the car, and it is owed to you as sixty thousand at a future date,” they came up with this nominal sale. Does the financing house now, if this man had not come asking for the car, buy the car? I am asking you?
The questioner : No.
The Shaykh : Does it buy it or not?
The questioner : No, it does not buy it.
The Shaykh : It does not buy it. And if the car applicant said, “Buy it at its value,” meaning: you buy it for fifty thousand and I take it from you in installments for fifty thousand, would the financing house give it to him?
The questioner : No, I do not think it would give it to him.
The Shaykh : I am certain that it would not give it to him; it is not just a guess. So what is the intention of the financing house in this transaction? It intends the increase. So this is, in reality, a loan with an increase, but through a ruse and a loop. And it is known that Allah (Mighty and Majestic) does not benefit from ruses. So He is[Ghafir 40:19] If one were to ask the financing house: “What is your intention in buying this car and selling it to this man?” it would say with certainty: “What is its intention? The increase.” There is no doubt, and it cannot claim that its intention is to do good to this man, ever. Some people say: for example, if the man said, “I do not want the car,” before accepting it. We say: First, this is an argument that does not benefit one with Allah, because will the one who requested the car leave it? He will not leave it, and he wants it. For this reason, if you counted a thousand transactions of this type, you would not find one of them who lightened it. So do not be deceived by the actions of people.
The questioner : Now, what about the profit that this man takes?
The Shaykh : The profit that this man takes is considered riba (usury or interest). And the explicit riba that banks do is easier than this, because explicit riba is riba that a person enters into knowing that he is disobeying Allah, and he tries to repent. But this, he enters into it thinking it is permissible. And this is not permissible. The Jews circumvented the prohibitions of Allah with less than this. Allah forbade them the fats and said: “Do not eat the fats.” So what did they do? They said: “We will melt the fat, then sell the fat and take the price.” Did they eat the fat in the current form? They did not eat it, nor did they sell the fat in its natural state; they also melted it, so that it would not be said: “You sold what was forbidden to you and ate its price.” They melted it, then sold it, and ate its price. And the Messenger (peace and blessings be upon him) said:.
And likewise, the People of the Sabbath were forbidden the fish on the Sabbath, so Allah tested them and made the fish come on the Sabbath in great numbers, swimming on the surface of the water. On days other than the Sabbath, they did not see them. So they said: “What shall we do? We cannot let these fish go without eating them.” They made a net that they would place on Friday, so the fish would come and enter the net on Friday, and when it was Sunday...
The student: On the Sabbath.
The Shaykh : No, when it was Sunday, they came and took them, and said: “We did not catch them on the Sabbath; we caught them on Sunday.” I said, yes, they place the nets on Friday, so the fish come on the Sabbath, the fish come on the Sabbath and are in this net, so when it is Sunday, they come and take them and say: “We did not catch them on the Sabbath; we caught them on Sunday.” So what were they punished with? They were punished in this world, hand by hand,[Al-Baqarah 2:65] and they became apes that howl, and I seek refuge in Allah.
So the important thing, my brothers, is that it is absolutely not permissible for us to make lawful the prohibitions of Allah through ruses, even if people give you a fatwa and give you a fatwa. Think for yourself: Is this anything but a ruse? But if this were a public treasury or a financing house that has cars, and Zayd comes and buys from it in cash for fifty, and 'Amr comes and says: “I want it in installments,” and it says: “For sixty,” there is no harm in that. But the fact that it does not buy except in order to take the riba (usury or interest), no person doubts that this is a ruse.
The questioner : And if he repents?
The Shaykh : If it is obligatory for him to repent, the person must not deal in this way. If he did not know that it was forbidden, then what he took is lawful. And if he knew and was stubborn, this is a matter for consideration. We may say: If he repents, he has what he has already taken, as Allah (Mighty and Majestic) said:[Al-Baqarah 2:275] And it may be said: No, this man is stubborn, so he must give in charity everything he took from this.
And the time is now over. May Allah bless you and increase us and you in beneficial knowledge, and until we meet, if Allah wills, next Thursday. We ask Allah for success for us and for you.
The questioner : Shaykh, may Allah reward you with good. I found an advertisement in Kuwait.
The Shaykh : What is it?
The questioner : An advertisement, an advertisement.
The Shaykh : An advertisement.
The questioner : About a loan, specifically providing a loan in installments, meaning paying it off in installments. It is, well, a person buys a car from a financing house, then transfers the car to my name, then he pays the financing house in installments, and then I transfer it to his name, or...
The Shaykh : I mean, for example, he goes to the financing house and says, “I want such-and-such a car,” so the financing house buys it from the showroom?
The questioner : It buys it in its own name.
The Shaykh : In its own name and pays the price, then sells it to this applicant for more than the price, in installments, yes?
The questioner : Yes.
The Shaykh : This is a ruse to circumvent riba (usury or interest). I mean: instead of saying, “Take fifty thousand riyals, the value of the car, and it is owed to you as sixty thousand at a future date,” they came up with this nominal sale. Does the financing house now, if this man had not come asking for the car, buy the car? I am asking you?
The questioner : No.
The Shaykh : Does it buy it or not?
The questioner : No, it does not buy it.
The Shaykh : It does not buy it. And if the car applicant said, “Buy it at its value,” meaning: you buy it for fifty thousand and I take it from you in installments for fifty thousand, would the financing house give it to him?
The questioner : No, I do not think it would give it to him.
The Shaykh : I am certain that it would not give it to him; it is not just a guess. So what is the intention of the financing house in this transaction? It intends the increase. So this is, in reality, a loan with an increase, but through a ruse and a loop. And it is known that Allah (Mighty and Majestic) does not benefit from ruses. So He is
He knows that which deceives the eyes and what the breasts conceal.
يَعْلَمُ خَائِنَةَ الْأَعْيُنِ وَمَا تُخْفِي الصُّدُورThe questioner : Now, what about the profit that this man takes?
The Shaykh : The profit that this man takes is considered riba (usury or interest). And the explicit riba that banks do is easier than this, because explicit riba is riba that a person enters into knowing that he is disobeying Allah, and he tries to repent. But this, he enters into it thinking it is permissible. And this is not permissible. The Jews circumvented the prohibitions of Allah with less than this. Allah forbade them the fats and said: “Do not eat the fats.” So what did they do? They said: “We will melt the fat, then sell the fat and take the price.” Did they eat the fat in the current form? They did not eat it, nor did they sell the fat in its natural state; they also melted it, so that it would not be said: “You sold what was forbidden to you and ate its price.” They melted it, then sold it, and ate its price. And the Messenger (peace and blessings be upon him) said:
May Allah kill the Jews! The fats were forbidden to them, so they rendered them into tallow, sold it, and ate its price
قاتل الله اليهود! حرمت عليهم الشحوم ثم جملوها فباعوها وأكلوا ثمنهاAnd likewise, the People of the Sabbath were forbidden the fish on the Sabbath, so Allah tested them and made the fish come on the Sabbath in great numbers, swimming on the surface of the water. On days other than the Sabbath, they did not see them. So they said: “What shall we do? We cannot let these fish go without eating them.” They made a net that they would place on Friday, so the fish would come and enter the net on Friday, and when it was Sunday...
The student: On the Sabbath.
The Shaykh : No, when it was Sunday, they came and took them, and said: “We did not catch them on the Sabbath; we caught them on Sunday.” I said, yes, they place the nets on Friday, so the fish come on the Sabbath, the fish come on the Sabbath and are in this net, so when it is Sunday, they come and take them and say: “We did not catch them on the Sabbath; we caught them on Sunday.” So what were they punished with? They were punished in this world, hand by hand,
and We said to them, "Be apes, despised."
فَقُلْنَا لَهُمْ كُونُوا قِرَدَةً خَاسِئِينَSo the important thing, my brothers, is that it is absolutely not permissible for us to make lawful the prohibitions of Allah through ruses, even if people give you a fatwa and give you a fatwa. Think for yourself: Is this anything but a ruse? But if this were a public treasury or a financing house that has cars, and Zayd comes and buys from it in cash for fifty, and 'Amr comes and says: “I want it in installments,” and it says: “For sixty,” there is no harm in that. But the fact that it does not buy except in order to take the riba (usury or interest), no person doubts that this is a ruse.
The questioner : And if he repents?
The Shaykh : If it is obligatory for him to repent, the person must not deal in this way. If he did not know that it was forbidden, then what he took is lawful. And if he knew and was stubborn, this is a matter for consideration. We may say: If he repents, he has what he has already taken, as Allah (Mighty and Majestic) said:
So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah
فَمَنْ جَاءَهُ مَوْعِظَةٌ مِنْ رَبِّهِ فَانْتَهَى فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللَّهِAnd the time is now over. May Allah bless you and increase us and you in beneficial knowledge, and until we meet, if Allah wills, next Thursday. We ask Allah for success for us and for you.