Date : 11-01-2016

Question :

What is the ruling of Sharia on the Murabaha contract of the Development and Employment Fund attached below?


The Answer :

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.


The General Iftaa` Department has reviewed the attached Murabaha contract and purchase order for some of the transactions conducted by the Development and Employment Fund in relation to the productive projects of  the unemployed youth program in remote desert areas. After careful consideration, it was found out that the contract is free of any violations of Sharia, and, thus, agrees with  its provisions.


However, those in charge of the Fund are responsible for the fulfillment of all the terms of the contract as well as the application of the practical terms of Islamic Murabah, as explained in fatwa No. (683). The most important of which is non sufficing with deputizing the client to purchase the commodities on behalf of the establishment/bank, as pointed out earlier in fatwa No. (2689).


We (Iftaa` Department) recommend appointing a Sharia supervisor on permanent basis to be able to follow up all contracts and procedures executed by the Fund to ensure correct application. And Allah the Almighty knows best.