Is tawarruq — where the bank buys a commodity for me and I sell it for cash — permissible?

Classical tawarruq is that a person genuinely buys a commodity on deferred credit at a higher price, takes possession of it, and then sells it in the market to an unrelated third party for cash because he needs money. The majority, including Ibn Bāz, Ibn ʿUthaymīn and the Permanent Committee, permitted this: each leg is a real sale, and "Allah has permitted trade and forbidden ribā." However, ʿUmar ibn ʿAbd al-ʿAzīz is reported to have called it "the little sister of ribā," and Ibn Taymiyyah and Ibn al-Qayyim disliked or prohibited it, seeing it as a contrivance to arrive at cash-now-for-more-cash-later. "Organised tawarruq" (tawarruq munaẓẓam) — where the bank arranges both the purchase and the onward sale as your agent, the commodity never really moves, and the customer only ever sees cash in and a larger debt out — was ruled impermissible by the OIC Islamic Fiqh Academy in 2009 and by many contemporary scholars, because it is a legal device closely resembling bayʿ al-ʿīnah, which the Prophet ﷺ warned would bring humiliation on the ummah until it returns to its religion. So: real tawarruq with genuine possession and a genuine third-party sale is a recognised difference of opinion and permitted by the majority; the automated bank product is best avoided, and one who needs cash should first seek a qarḍ ḥasan or a straightforward murābaḥa for the thing he actually wants.

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