Banking: Circumventing Ribā Through Installment or Exchange Bill Transactions
Practical Laws of Islam as per the teachings of Imam Khamenei
Banking: Circumventing Ribā Through Installment or Exchange Bill Transactions
English:
Question #1905:
Where the bank charges interest on the loans it grants, can one circumvent this by, say, buying one thousand bank notes for cash to be repaid by twelve monthly installments with the surcharge, or by buying from the bank twelve bills of exchange, totaling one thousand two hundred, for one thousand in cash provided that the total of these bills be settled in twelve months?
Answer #1905:
Such fallacious transaction which is nothing but a way to escape the dabbling in ribā-bearing loan is ḥarām and invalid.
-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Banking