Sharʿi Ruling on Bayʿ al-ʿĪnah (Reverse Sale) on Installments

Author: Dr. Muhammad Ziya-ur-Rahman Azmi رحمه الله
◈ Another Prohibited Form of Installment Sale – Bayʿ al-ʿĪnah Explained ◈

❖ The Ruling:​

If a person:

• Purchases an item on installments (deferred payment),
• And then sells the same item back to the original seller for a lesser amount in cash,

This is known as Bayʿ al-ʿĪnah, and it is not permissible in Sharīʿah.

❖ Why Is It Ḥarām?​

This transaction is a hidden form of ribā (interest).

• The buyer essentially receives cash today
• And agrees to pay more later,
• Under the guise of a sale and resale.

So the transaction becomes nothing but:

More money in exchange for less money with a delay,
→ Which is ribā in its essence.

❖ Permissible Alternative:​

✔ If the buyer purchases an item (e.g., a car) on installments and then sells it to a third party (not the original seller), for cash —
→ This is permissible, provided there is:

• Genuine transfer of ownership,
• No prior agreement to sell it back to the seller.

❖ Example:​

A person buys a car on deferred installments to:

• Arrange funds for marriage,
• Repay a debt,
• Or purchase a house,

And he sells that car to someone else,
→ This is allowed.


But to sell it back to the original seller for immediate cash is Bayʿ al-ʿĪnah, which is:


✖ Prohibited,
✖ As it is a legal trick (ḥīlah) to obtain a cash loan with interest.


Ibn ʿUthaymīn – Nūr ʿala al-Darb 13/19