All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
Having examined the Arab Islamic Bank`s contracts of Murabaha to the purchase orderer, it was found out that they are free of any violations of Sharia and so they are valid. Accordingly, it is permissible to engage in these contracts if the Bank`s clerk adheres to implementing the conditions stipulated by Sharia in this regard.
As for conditioning mortgaging the sold commodity to guarantee its price, the reliable opinion of the Shafie scholars, in this regard, is that of the eminent scholar Ibn Hajar (May Allah be pleased with him), who said: "Sale transaction isn`t valid with the condition of mortgaging the commodity, whether before or after the purchaser takes possession of it. If the purchaser stipulated mortgaging the commodity after taking possession of it, without a condition or with the condition of absolute mortgage, then this sale is valid and so is the mortgaging." {Al-Fatwa Al-Fiqhiyah Al-Kubra, vol.2/pp.189}.
However, this sale transaction is permissible according to the reliable opinion of the Hanbali Madhab. Al-Bahwati (May Allah have mercy on him) says: "It is permissible to mortgage the sold commodity against its price. If the seller said: "I sell you this commodity under the condition of mortgaging it against its price" and the buyer said: "I agree and approve of mortgaging it to you," then the sale is valid and so is the mortgaging." {Khash-Shaf Al-Khinaa`, vol.3/pp.189}.
Based on the reliable opinion of the Hanbali Madhab, Resolution (133) (14/7) of the Islamic Fiqh Academy stated: "The seller doesn`t have the right to retain ownership of the sold commodity. However, it is permissible for the seller to stipulate that the buyer mortgages the commodity in his name to guarantee collecting the delayed payments." And Allah The Almighty Knows Best.