We are manufacturer in textile products, we just purchased yarn from a mill on terms of L/C (120 days Payment ) First, I (buyer) request to the mill(Seller) to send us quotation based on payment 120days L/C He (Seller) faxed me (Buyer) the price based on 120 days payment on L/c basis for example US$ 50/bag of yarn. (All markup charges by bank on account of seller ) So in this contact I will not pay any bank interest (or markup) except I will delay the payment after 120days . I am in confidence that in sha’ Allah, I will pay to the bank (sellers bank) payment on due date ( within 120days ) My question is this is this contract fulfill the requirements in Islam. Is this type of contract is permissible for me (Buyer) Thanks for yours reply in advance.
Answer:
(Fatwa: 1146/1089=B/1430)
There is nothing wrong if you pay the amount to the bank within 120 days without paying any additional amount or interest, but it will be unlawful in case of late payment; since you will have to pay interest.
Allah (Subhana Wa Ta’ala) knows Best
Darul Ifta,
Darul Uloom Deoband