There are two opinions according to contemporary scholars on the use of tawarruq is Islamic banks:
- It is not permissible. This is the opinion of International Fiqh Academy and of most contemporary scholars such as Dr Siddiq Darir, Dr Ali Saalus, Dr Sami Al Suwailem, Dr Yusuf Shubayli, Monzer Kahf, and Ahmad Islambuli. They argue that this sort of transaction. is a form of bai’ al ‘inah, which is a haram mode of transaction.
- It is permissible. This is the opinion of a group of shariah boards and some scholars such as Dr Nazih Hammad, Dr Muhammad Al Qura, Ahmad Al Rashidi. Mufti Taqi says it is permissible but does not advice to use it widely. Also, AAOIFI allow the use of tawarruq within certain parameters. These scholars argue that the structure of the tawarruq found in banks is the same one which scholars of the past have considered as permissible.
And Allah knows best!
(Mufti) Billal Omarjee