Shariah Compliant Banks

Your first option would be to try and acquire an interest-free loan from family members and close associates to purchase assets.

If acquiring an interest-free loan is not possible, then you may request a finance provider to purchase the asset you are interested in. The asset will belong to the finance provider.  The finance provider should take possession of the asset by acquiring the legal documents that indicate towards ownership such as the title deeds of a property, or the log book in the case of a vehicle. It is not necessary that the asset is transferred into the finance provider’s name. Now that the finance provider is considered as the owner of the asset, he may sell it to you at a profit with the proviso that the final selling price, monthly installment amount, total number of installments, etc. are all fixed, leaving absolutely no room for any future dispute. Also, the finance agreement should not contain any un-Islamic clauses, nor should any form of insurance be mandatory.

These are the two options that may be implemented in purchasing assets.

ALLAH TA’ALA KNOWS BEST!

ANSWERED BY:

Maulana Abdul Kader Fazlani

Date: 11 Muharram 1446 / 18 July 2024

CHECKED AND APPROVED BY:

Mufti Mohammed Desai