BANKING “TAWARRUQ”

*     Which Islamic jurists consider tawarruq¹ as part of al-'inah² and what is the reason?

*     Which Islamic jurists consider tawarruq as something different from al-'inah and what is the reason?

*     Are there certain forms of tawarruq which are considered as similar to al-'inah even by those jurists who permit the tawarruq?

*     Whether the forms of tawarruq practiced by Islamic banks these days are  nearer to al-'inah contract. Why?

*     If ‘tawarruq’  is an arranged banking practice, will the rule of al-'inah apply over it?

*     What is intended from the contemporary tawarruq, sale and purchase or financing (borrowing and lending)?

*     Is the ‘tawarruq’  absolutely permissible or are its cetrain forms valid while some others are invalid?

*     Is it just to support the permissibility of tawarruq by the hadith “… Sell the inferior dates with dirhams and then buy with those dirhams chosen superior quality"?

*     It it likely that the permissibility of tawarruq shall lead to exorbrtant rate, even higher than the rate of interest?

*     Do you think that ‘tawarruq’  involves exploitation of the need and weak position of one who is forced to obtain money in this way?

*    Do you think that tawarruq will become an attractive way for clients to deal with the banks without any discomfort and hesitation?

    ___________________________

1.Tawarruq referes to the practice of buying a commodity from someone on credit and then selling it to a third person on cash at a price less than the purchase price.

2. If the buyer on credit resells that commodity to the same person, it is called al-'inah .