Please check the finance application form which I am sending and advise if it is permissible to purchase the asset.

Answer

With regard to the application form, please note the following:

(1) The R150 administration charge is not permissible. It is a riba charge. (2) If Seller will be compelled to pay R50 to a non-Muslim bank which dishonoured the cheque, then it (An-Nahl) may load the charge on to the client, otherwise not. In other words, if An-Nahl itself is a bank and it dis-honours your cheque, then the R50 charge will be riba.

(3) In the note on page 4 appears the following statement:

"Once the application has been approved we authorise you to act as an agent on behalf of AN-NAHL LTD." This condition is not valid. You are the purchaser. If you are appointed an agent of An-Nahl, then you become 'An-Nahl' since the agent is in the capacity of the principal who appointed him to be its agent. A man cannot sell his own assets to himself. If you are An-Nahl's agent, then who is the seller who will sell to you the asset? The sale could be simply rectified and brought in line with the Shariah in the following way:

1. The R150 riba (administration)

charge must be waived.

2. The R50 for non-payment to fall away if An-Nahl is not required to pay this sum to a kaafir bank.

3. An-Nahl should appoint another person to accompany you to purchase the asset. The other person will be the agent. Once An-Nahl's agent has finalized the purchase, he should authorize you to take possession of the asset. Thus, the actual sale will be effected after the agent has purchased the vehicle, and it will be finalized with possession being assigned to you.