Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

There are many fundamental as well as procedural differences between Islamic Banks and Conventional Banks.

The issue is not about the final amount. Adding the interest amount to the purchase price in a conventional bank will not make the transaction Shariah Compliant as the full amount will still be regarded as a loan with interest.

In an Islamic Bank, the Bank purchases the business and after assuming full ownership, sells the house to the purchaser with a profit. In this case, the purchaser pays for the house and not simply towards a loan.

Accordingly, the arrangement with the Conventional Bank to add the interest amount to the loan is not permissible. If this procedure is used in the purchase of motor cars, then that too will not be permissible.

and Allah Ta'ala Knows Best

(Mawlana) Ismail Desai
Student: Darul Ifta

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