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Islamic Bank Must Own Commodity before Selling it to Client

When purchasing construction materials by means of Murabah from the Jordan Islamic Bank, receipt and delivery is done at the construction site (Client's place) while the International Islamic Arab Bank insists on receiving the commodities from the shop of the seller. Which is more valid from the perspective of Sharia?


Answer: All perfect praise be to Allah the Lord of the Worlds. May Allah`s peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

Concerning Murabaha transaction, the Islamic Bank should make sure that two conditions are met:

First: Receipt of commodity. This is achieved when the bank signs the purchase contract with the first owner. The evidence on this is that it was narrated that Hakim bin Hizam said: "I said: 'O Messenger of Allah, a man is asking me to sell him something that I do not possess; Shall I sell it to him?' He said: 'Do not sell what is not with you." {Abu Dawud, No. 3503}.

Second: Actual or presumptive receipt of commodity. This is attested to in the following Hadith: Ibn Abbas (Allah be pleased with them) reported Allah's Messenger (PBUH) as saying: He who buys food-rain should not sell it until he has taken possession of it. Ibn Abbas (Allah be pleased with them) said: I regard everything like food (so far as this principle is concerned).

Receipt is achieved when the bank`s clerk receives the commodity at the seller`s shop or the place where the client wants the commodity to be moved to. Thus, if the clerk carries the commodity by car to the place decided by the client, then this confirms that receipt has taken place. After that, not before it, the client may sign the sale contract with the Islamic Bank. And Allah the Almighty knows best. 



This answer was collected from the official government Iftaa Department of Jordan.

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