The excess in price in this manner is a back door to Riba
Fatwa No: 16198

  • Fatwa Date:3-2-2014 - Rabee' Al-Aakhir 3, 1435
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I bought a car through the Islamic bank. I asked for a sum that is higher than the price of the car in order to handle some important affairs with the extra sum of money. Is this act permissible under Sharee‘ah? Please advise. May Allaah Reward you.


All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

If you and the seller of the car agreed to sell the car whose price is ten, for example, for twenty, and then after the seller receives the money from the bank, he gives you the extra sum of money, this form of transaction is Riba because you used this sale as an excuse to justify a loan that you will repay with interest (because the remuneration that the bank will get is not just for the car but also for the extra sum of money).

Your need to buy some things does not justify committing prohibited things and Riba, which is an aggression against Allaah. Dear brother, it was better for you to supplicate Allaah to Facilitate your affairs and Gratify your need. Repentance and asking for the Forgiveness of Allaah are the ideal solution for you.

We alert those who are responsible in the Islamic banks not to be deceived by these tricks. They buy the car from its owner in a legitimate way and it is transferred to their possession, then they sell it in installments to the buyer. So, how could they buy it for a price higher than its actual selling price? There must be some mistakes made by those who are responsible for the processes of buying and selling in banks which must be avoided. Otherwise scholars may reconsider issuing Fatwas regarding permissibility of this kind of transaction at least.

Allaah Knows best.

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