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Subject : It isn`t Permissible for a Motor Dealership to Facilitate Sale Transactions for Customers Via Riba-Based Banks

Fatwa Number : 603

Date : 12-04-2010

Classified : Usury (interest) &Loans

Fatwa Type : Search Fatawaa

Question :

We are a motor dealership. 90% of our sale transactions are conducted via Riba-based banks. We fax the paper work to different banks, mostly Riba-based, until we get an approval for funding from one of them. It is worth pointing out that we aren`t liable in case the customer failed to make payment on time. When the bank approves the funding, it makes claim on the car as security for payment of loan. Is this lawful or not? Are we liable for anything before Almighty Allah?

The Answer :

As understood from the above question, the motor dealership facilitates for the customer to obtain a loan from a bank under the condition that he/she gives it back with interest. The loan is paid to the motor dealership, then the concession of the ownership is made directly to the customer while the bank makes claim on the car as security for payment of loan. Obviously, the role played by this dealership isn`t permissible since it helps the customer obtain a usurious loan. This is helping in sin and rancor, which is forbidden by Allah. This transaction is similar to the practice of the people of pre-Islamic times; namely, the two types of Riba (Usury): Delay usury and Excess usury, which are forbidden by Sharia. The evidence on this is that Allah says (What means):" O ye who believe! Observe your duty to Allah, and give up what remaineth (due to you) from usury, if ye are (in truth) believers. And if ye do not, then be warned of war (against you) from Allah and His messenger. And if ye repent, then ye have your principal (without interest). Wrong not, and ye shall not be wronged." {Al-Baqarah, 278-279}.

The Eminent scholar Al-Iz Ibn Abdullsalam (May Allah have mercy on him) said: "What leads to lawful actions is also lawful and what leads to unlawful actions is also unlawful."

Since Riba/usury is unlawful, what leads to it is also unlawful. Therefore, the role played by the above motor dealership is unlawful because it facilitates for the unlawful. This is attested to in the following verse: " Help not one another unto sin and transgression, but keep your duty to Allah. Lo! Allah is severe in punishment." {Al-Mai`dah, 2}. And Allah the Almighty knows best.



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