Bai’ul Inah – Is it really Permissible? Part III

Following is an illustration of a Bai’ul Inah transactions:

For example, Al-ABC Bank is a bank and Ahmad is a customer who is seeking for a financial assistance from a bank for his business. Ahmad came to Al-ABC Bank and applying for a loan through the Bai’ul Inah concept that offered by Al-ABC Bank.

Al-ABC Bank then will sell an asset to Ahmad (e.g: Bank’s Photostate Machine) on deferred payment basis at RM10,000. Thereafter, Al‐Amin Bank will immediately buy back the photostate machine from Ahmad for cash (spot payment) at RM6,000 (price that is lower than the initial selling price).

And in the end, Ahmad will received RM6,00 and indebted Al-ABC Bank for Rm10,000 with an extra amount of RM4,000.