Seller knowing that the customer is paying with money loaned from the bank

26 Feb 2018 Ref-No#: 242

Assalamu alaykum wa rahmatullahi wa barakatuhu

If a buyer pays with a cheque, and the seller knows that the buyer took a loan from the bank to pay for his goods, will it be permissible for him to conclude the deal?

Likewise, if I sell cars and I know the customer is financing it through the bank, can I sell to him?

Answer

If the seller merely concludes the deal with the buyer and is not in any way required either by the buyer or the bank to formally authorise the actual granting of the loan, then he (the seller) will not be party to the interest-bearing loan that is acquired by the buyer. This scenario will be permissible as the formalities that are required to conclude the deal are entirely between the buyer and his bank. The seller has to only accept the cheque payment issued by the bank. It will make no difference whether the customer is a Muslim or a Kaafir. If the buyer is a Muslim, then the sin of indulging in an interest transaction with his bank will be squarely on his shoulders and not on the seller, as he (the seller) has no part in the interest discussion and arrangement.

If the object is merely to confirm the sale, then instead of signing bank forms, the seller should issue his own invoice or statement, which would suffice as proof of the sale having been concluded. Thereafter he should leave it to the buyer to procure the loan from his bank by means of the invoice.

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