Islamic Verdicts - Volume III

Riba, Loans and working in banks

Riba, Loans and working in banks

Do not sell what you do not have

Q: What is the ruling on selling loans by way of buying and selling products while they are in their place? This method is followed by some of the people in their loan transactions in the current times.

A: It is not permissible for the Muslim to sell a product for cash payment or delayed payment, unless the person owns the product and he actually possesses it. This is due to the statement of the Prophet (Salallahou 'aleyhi wa salam) Hakeem bin Hizam: "Do not sell what you do not have" (Abu Dawud no. 3503).

This is also due to his statement in a Hadith of 'Abdullah bin 'Amr bin Al-'Aas (Radiyallahou 'an-ou): “It is not permissible to make a loan and a sale (in one transaction), nor selling what you do not have” (Abu Dawud no. 3504).

This was recorded by the Five with an authentic chain of narration. Likewise, the one who bought the product may not sell it until he also has it in his possession due to the two mentioned Hadiths. This is also due to what Imam Ahmad and Abu Dawud recorded, and Ibn Hibban and Al-Hakim graded it authentic, on the authority of Zaid bin Thabit (Radiyallahou 'an-ou). He (Zaid) said, "The Messenger of Allah (Salallahou 'aleyhi wa salam) prohibited that products be sold where they are bought until the merchants (who bought them) move them to their places." Likewise, Al-Bukhari recorded in his Sahih from Ibn 'Umar (Radiyallahou 'an-oum) that he said, "Verily I saw the people in the time of the Messenger of Allah (Salallahou 'aleyhi wa salam) buying food and they were prevented from selling it in its place (of purchase) until they transported it to their places."

The Hadiths with this same meaning are numerous.

Ash- Shaykh Ibn Baz

This Contract is correct

Q: A person took a sum of 10,000 from another person with an agreement that he would buy a car for him and this was to be done a year after his receiving the mentioned 10,000. Is this contract permissible or not?

A: If the matter is as mentioned, and the car's characteristics were known, and the 10,000 was the total price, and the appointed time was known, then the contract is correct.

The Permanent Committee

The ruling on taking a Down Payment

Q: What is the ruling on the seller taking a down payment if the sale has not been finalized? The way this takes place is that two people will enter a sale, and if the sale is finalized, the complete price is paid. If the sale is not finalized, the seller takes a down payment, which he does not return to the buyer.

A: There is no harm in taking a down payment according to the most correct opinion of the scholars, if the seller and buyer agree to that and the sale has not been finalized.

Ash-Shaykh Ibn Baz

There is no Sin on you due to your ignorance of the ruling

Q: I work in Saudi Arabia and I transfer sums of money to my country, Sudan, by way of a person who gives me Saudi riyals, and I give him a piece of paper for my customer in Sudan so that he will give him in return Sudanese Junayhs. Thus, both of us benefit from the difference in the currencies. Then, I send the riyals to the National Bank in America and after that we transfer it to Sudan. By this method the dollar gets a return of two dollars. What should I do after finding out that this is forbidden, especially since I got married from this money and I have business projects and real estate properties from it?

A: It is correct that this transaction is from those things that are prohibited, because from the condition of money exchange is that it must be hand to hand (i.e., paid up front). So, if you want to exchange Saudi riyals for Sudanese Junayhs and then send the Junayhs to Sudan, then you should take the riyals and give the Junayhs (on the spot), then send the riyals to the customer or you should send the riyals to Sudan and let them be exchanged for Sudanese Junayhs therewith on the spot exchange taking place. However, you take the rivals here and give a piece of paper (for payment later) to the customer, so mutual exchange is not achieved. Also, the price could change during this period of time. Also, there is the Riba transaction that occurs with the bank of the United States, which is one of the Riba banks, as you get a profitable increase in it (due to interest on the account), as mentioned in the question. There is no doubt that this increase is from the clearly forbidden Riba. However, with all of this, what is obligatory is that you repent from this action, leave it and replace it with permissible transactions in which there is no doubt or suspicion. In reference to the wealth that you earned by this method while you were ignorant of the ruling, there is no problem in acquiring it and you own whatever you got from it of real estate, payment of the bridal dowry and expenditures.

Ash-Shaykh Ibn Jibreen