Is the Home Purchase Plan offered by the Islamic Bank of Britain permissible?
Answer:
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
It is not possible to issue a ruling with respect to any product of any bank without assessing and analysing the contract agreed upon.
Just by having an Islamic term like Mudhārabah, Wakālah, Ijārah does not make a product Shari’ah compliant. Likewise, the end result of certain Islamic products may seem to be similar to that of a conventional product; however, this does not imply that they are non-Shari’ah compliant. For example, in a Shari’ah compliant Murābahah contract and an interest bearing mortgage, the purchaser ends up paying more than the real worth of a property, however, the first contract-if it is Shari’ah compliant in the true sense-is permissible and the latter is impermissible.
The above can be understood from the following example: Two chickens are slaughtered; one by a Muslim with the tasmiyah and the other by a non-Muslim. They look identical after the slaughter. The end product is the same. They are packed and shipped in the same method. They are even stacked next to one another on the shelves. However, one is pure and halāl to consume whilst the other is harām for consumption. The process of slaughtering was the governing factor. Likewise, in any financial agreement, the contract is the governing factor and not mere similarities.
And Allah Ta’āla Knows Best
Mufti Faraz ibn Adam al-Mahmudi,
www.darulfiqh.com