Purchased Household Products by Installments from Bank
Fatwa No: 391096

  • Fatwa Date:31-1-2019 - Jumaadaa Al-Oula 25, 1440
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Question

Assalamualikum,My name is Mustafa and I am from Cambodia. I would like to have some questions regarding Riba.I used to purchase some household products for my home by installment payment with the bank. In the past I didn't realize that this kind of purchase was associated with Riba. Someone told me that when you make the purchase, as long as you don't ask the bank about the interest and just ask for the full price of installment payment, and you consider the price is higher than immediate payment due to seller take risk of future inflation, it is fine to purchase. Just recently I watched some commons from Ulama om Youtube regarding this matter, if the interested is stipulated in the agreement and you sign on it, then the purchase is associated with Riba and it is Haram. Now I fee very guilty and dissapointed for what I did with this type of purchase. However I tried to discuss with the bank to clear the settlement, the bank said some interest still apply as it is the bank rule. Now I would like to seek your advise:1. what should I do if I didn't aware of this sinful mistake?2. what should I do with the products that I've already purchased which I believe they are associated with interest (Riba)your advise is very much appreciated.May Allah bless you.Thanks

Answer

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

We will summarize our answer to your question in the following points:

Firstly: There is no harm in benefiting from and making use of the products and items you had purchased from the bank.

Secondly: you did not clarify to us the method of the transaction between you and the bank. If we presume that the bank sold you the goods after possessing them, then there is nothing wrong in that, even if the price of the sold goods was more than its current price, because time has a impact on the price; immediately paying for the sale is not like delaying the payment.

If the bank did not own the goods, and it just paid the price to the seller on your behalf, and then the bank got the money from you with additional amount, then this is actually a Riba-based loan. However, since you had undertaken this transaction while you were unaware of the ruling (that it is forbidden), then we hope that you are not sinful.

Thirdly: The fact that the bank wants to drop some of te interest amount if you hasten the repayment, then this is a good thing and you should hasten to repay. This is because if we presume that the transaction is Riba (interest and/or usury), then you are not obliged to pay the interest anyways. You should seek a means to drop the repayment of this interest.

If we presume that the transaction was a valid and permissible sale transaction and you wanted to hasten in repaying, and for this reason, the bank dropped some interests, then this is acceptable.

For more benefit, please refer to Fataawa 95608 and 12927.

Allah knows best.

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