QUESTION: For example, if a customer wants to build a house, the bank purchases the construction materials from a hardware supplier and charges the customer a profit of 9% per annum over an agreed repayment period. The customer then repays the original cost plus the accumulated profit. Is this arrangement Shariah-compliant?
QUESTION: For example, if a customer wants to build a house, the bank purchases the construction materials from a hardware supplier and charges the customer a profit of 9% per annum over an agreed repayment period. The customer then repays the original cost plus the accumulated profit. Is this arrangement Shariah-compliant?
27Oct
ANSWER:
If the bank buys it without any commitment from the customer and after the bank possesses it, the bank calls the customer to see if he is interested in finalizing the deal or not and the customer has the right to refuse and not complete it, this is permissible providing that the final price is fixed and can’t be increased and there is no late fee penalty.
QUESTION: For example, if a customer wants to build a house, the bank purchases the construction materials from a hardware supplier and charges the customer a profit of 9% per annum over an agreed repayment period. The customer then repays the original cost plus the accumulated profit. Is this arrangement Shariah-compliant?