(9.2) Mortgage of sold goods

(9.2) Mortgage of sold goods

Question:

Is it permissible for the Islamic bank to use the commodity sold in

a Murabaha transaction as collateral?

Answer:

In view of the fact that the "contract is the law of the contractors" then if the seller contractually stipulated that the sold material be retained until the performance of the entire price then this is a condition required by the contract. However, the seller is entitled to retain the sold material if the price will be paid on the spot, otherwise if it is on credit basis then it is impermissible to retain the sold material as the seller in such case has already accepted the delay of payment; yet he has the right to put the sold material under trust-mortgage a matter that is officially stipulated in the contract until the whole price is settled down, in order to ensure the right of the bank, as the trust-mortgage does not prohibit the owner from disposing of his property.

Source:

Fatwas of Shari'ah Board of Dubai Islamic Bank, Fatwa No. (22).

(9.3) To keep the registration in the name of the bank Question:

Is it permissible for the bank to purchase a residential house, register it in its name and then sell it to the customer of the bank on installment basis for a specific period of time against conclusion of an initial sale contract only and without registering such a house at the real Estate Registration Department, provided that same registration will be conducted at the end of installment period?

Answer:

This is permissible unless the (purchaser) client offers another mortgage that fulfills its obligations towards the bank.

Source:

Fatwas of shari'ah Board of Qatar Islamic Bank, Fatwa No. (29).

(9.4) Presentation of cheques, bonds and the like Question (1):

A client requested to purchase goods, vehicle or any other commodity from the department of Local Murabaha. Based on our consideration of the sale form submitted by the client we are in need of a strong guarantee to execute the transaction and so we ask for the submission of a guarantee cheque from the guarantor.

Is it Shariah permissible, to ask for the submission of a guarantee cheque from the guarantor?

Answer:

Upon receipt of a cheque from the guarantor to ensure the settlement of the client's debt, in case of default in payment, the guarantor should be provided with a written letter which stipulates that the cheque will not be drawn except in the case of non- payment bearing in mind that when the client delayed the payment of one installment all other installments should be due in order to preserve the right of the guarantor for fear of submission of the Upon receipt of a cheque from the guarantor to ensure the settlement of the client's debt, in case of default in payment, the guarantor should be provided with a written letter which stipulates that the cheque will not be drawn except in the case of non- payment bearing in mind that when the client delayed the payment of one installment all other installments should be due in order to preserve the right of the guarantor for fear of submission of the

Source:

Kuwait Finance House, Book of Fatwas on Economic Issues, parts (1), and (2), Fatwa No. (397).

Question (2):

Is it permissible for the purchase orderer to submit bonds or cheques for the deferred price?

Answer:

There is no objection, in case of credit transactions, to demand bills, cheques or promissory notes from the customer according to the maturity dates of the due installments of the price.

Source:

Dallah Al-Barakah Group, Development and Research Department, Resolutions & Recommendations of AlBaraka Symposia on the Islamic Economy, (First, Second and Third Seminars), Fatwa No. (11).