Ruling on exchanging money for money and selling via murabahah?

The questioner : Well, this sister reminded us of an issue. There are riba-based banks that have opened branches called Islamic branches.

The Shaykh : And where?

The questioner : In Riyadh.

The Shaykh: Allah is the Greatest!

The questioner : These branches have activities. The first activity is currency exchange, exchanging money for money. The other activity is selling via murabahah, that is, selling via murabahah.

The Shaykh : It is not permissible, it is not permissible. It is well known that banks with these names engage in what they call murabahah.

The questioner : Selling via murabahah is not permissible.

The Shaykh : This is a sale of specification.

The questioner : This is the brother who works in it. He described it to me, meaning he wanted the answer. He said, "I work in this. I will describe to you how the sale is done." He said, "A form is given to the person."

The Shaykh : My brother, this is well known. There is no need for a description.

The questioner : It is not permissible.

The Shaykh : It is not permissible. You are a merchant. I want to buy a car. You offer it on installments for ten thousand, while the cash price is approximately eight thousand, not exactly. This is the owner of the bank, God forbid. I go to him, and he inserts an intermediary between you and me. He inserts an intermediary between you and me. He takes the car from you for eight thousand cash and sells it to me for nine thousand, and I pay him what? Ten thousand. So he profits from here and from here. This is the intermediary.

The questioner : Yes, the one that was done was the opposite, O Shaykh.

The Shaykh : How?

The questioner : The one that was done with our brother is that the bank says to the buyer, "Go and find out the price of the car. For example, let us say its price is ten thousand." The bank pays this merchant ten thousand, and the buyer pays the bank interest for a period of three years.

The Shaykh : My brother, all riba...

The questioner : This is, meaning, the bank pays the original price, but the buyer pays the bank interest for each year, and for a period of, meaning, the bank says, "This is ten thousand for the car," but the buyer pays the bank in installments.

The Shaykh : It is well known.

The questioner : And he pays him interest for each year.

The Shaykh : If the term is increased, the price is increased. If the term is decreased, the price is decreased. This is the work of riba. We know people from among our brothers who went to the Islamic bank wanting to buy a machine from Europe via the bank, before the bank... so on, until it reaches here. And we want a murabahah of such a percentage within six months. He said, "I cannot pay the amount within six months." He said, "Every year," and he doubled it. He doubled the term, and they doubled for him what? The price. This is riba. But as it is said, "The causes are many, but death is one." And the Messenger (peace and blessings be upon him), whom Allah has blessed us with, explained to us everything that benefits us and forbade us from everything that harms us. He said: to the end of the hadith. And 'inah. 'inah cannot occur except after the establishment of installment sales. Without installment sales, 'inah does not occur. I think you know the sale of 'inah.

The questioner : ... .

The Shaykh : Yes, yes. The sale of 'inah. I want dirhams or dinars, so I go to Zayd and Bakr, who are rich. They do not pay. Why? Because the souls have brought forth greed, and the bond that the Lord of the Worlds tied between the Muslims, one to another, has been broken. That is, the example that the Messenger (peace and blessings be upon him) struck, to the end, did not... Therefore, Muslims have followed the ways of the polytheists in seeking to achieve their material interests. He comes to the merchant and says to him, "I want to buy this car on installments. How much?" For example, its cash price is ten thousand, and the installment price is twelve. He says to him, "I bought it. Record twelve for him." The seller returns as a buyer, and the buyer as a seller. The one who bought the car says, "I will sell you this car for cash." The capital becomes with the merchant. Let us assume, for example, eight thousand. He bought it from him for less than eight thousand. So he profits two profits: the profit recorded for the installment of twelve, and the profit of buying the car from him for cash.