The PRIMARY OIC ruling that names the site’s central maxim out loud — a ‘sale’ that is really ‘a loan which generates a benefit’ is riba, and is void.
The PRIMARY OIC ruling that names the site’s central maxim out loud — a ‘sale’ that is really ‘a loan which generates a benefit’ is riba, and is void. International Islamic Fiqh Academy (OIC), Resolution No. 66 (4/7), titled ‘Bay al-Wafa (Selling with Repurchase Right)’ in the Academy’s official English edition and ‘Bay’al-Wafa (Debt Guarantee Sale)’ in the IRTI/IDB edition, adopted at the 7th session (Jeddah, 7–12 Dhū al-Qi’dah 1412h / 9–14 May 1992). Bay al-wafa is the classic ‘sell it to me, and whenever you repay the price I hand it back’ arrangement — a secured loan wearing a sale’s clothing. The Academy resolves that it is in fact ‘a loan which generates a benefit,’ therefore ‘a fraudulent practice of Ribā,’ invalid by the majority of scholars, and ‘not permissible in Shariah.’ This is the primary-source anchor for the rule that runs through the whole site: if a lender takes any benefit from a loan, that benefit is the riba, no matter what the paperwork calls the transaction.
What this source says
THIS IS THE RESOLUTION THAT SAYS THE QUIET PART OUT LOUD. The single principle underneath almost everything on this site is the maxim that a loan which brings the lender a benefit is riba — that you cannot dress interest up as something else by renaming the contract. Bay al-wafa is the textbook case, and in Resolution No. 66 (4/7), adopted at its 7th session (Jeddah, 9–14 May 1992), the OIC International Islamic Fiqh Academy names the trick precisely and voids it.
WHAT BAY AL-WAFA ACTUALLY IS. The Academy describes the structure in the preamble. Verbatim (official edition): ‘the sale of a commodity on the condition that any time the seller returns the price, the purchaser returns to him the object of the sale.’ In plain terms: I ‘sell’ you my asset for a sum of cash, on the standing condition that whenever I give the cash back, you must return the asset to me. Nothing has really been sold — I have handed you an asset as security and taken cash, and I will get the asset back when I repay. It is a pawn/mortgage in the shape of a sale. The reason anyone bothers with this shape is the benefit in between: while the ‘purchaser’ holds the asset, he can use it, live in it, or collect its yield — and THAT benefit, flowing to the party who advanced the money, is exactly what turns a loan into riba.
THE TWO RULES THAT DO THE WORK. Verbatim (official edition): ‘First: This type of sale is in fact “a loan which generates a benefit”; therefore, it is a fraudulent practice of Ribā, and is considered invalid by the majority of scholars. Second: This contract is not permissible in Shariah.’ The IRTI/IDB edition renders the same two rulings under the title ‘Debt Guarantee Sale’: ‘First: That this sale is in fact "a loan which has generated a profit". It is therefore a fraudulent practice of Riba, and is considered unsound by the majority of Ulema. Second: The Academy considering this contact prohibited in Shari’a.’ Two independent translations, one verdict: the label ‘sale’ does not save it; the substance is a loan with a benefit attached, and a benefit attached to a loan is riba.
WHY ‘A LOAN WHICH GENERATES A BENEFIT’ IS THE LOAD-BEARING PHRASE. Notice that the Academy does not reject bay al-wafa because of a technicality in the sale. It looks past the form to the substance and finds a loan — money advanced, to be returned — with a benefit riding on top for the lender. That is the definition of riba an-nasiah in miniature. This is the same reasoning the corpus applies elsewhere: it is why an interest-bearing bond is prohibited (Res 60), why a current account is a loan whose only lawful ‘benefit’ is safekeeping and not a paid return (Res 86, Res 222), and why a rent-to-own deal must be a genuine lease-plus-choice rather than a credit sale with interest hidden in the rent (Res 44). Res 66 is the cleanest single statement of the underlying test: find the loan, then ask what benefit the lender is taking from it.
AN HONEST NOTE ON ‘THE MAJORITY.’ The resolution does not claim unanimity — it says bay al-wafa is invalid ‘by the majority of scholars’ (official) / ‘by the majority of Ulema’ (IRTI). That wording is itself honest: it acknowledges that some jurists historically tolerated the contract (it was treated as a real, if debated, transaction in parts of the later tradition) rather than pretending the question never had two sides. The Academy’s collective ruling comes down with the majority and closes the question for the purposes of contemporary practice, but it does so without erasing the disagreement it inherited. This entry reports the ‘majority’ wording exactly and does not name, tally, or reconstruct the minority view, because Res 66’s own text names none.
GENUINE DIFFERENCES BETWEEN THE TWO EDITIONS (disclosed, not smoothed). The two translations diverge in wording throughout — the title itself (‘Bay al-Wafa (Selling with Repurchase Right)’ vs ‘BAY’AL-WAFA (DEBT GUARANTEE SALE)’: one edition foregrounds the seller’s right to buy back, the other foregrounds the security/debt-guarantee function — two accurate faces of the same contract), the operative phrasing (‘a loan which generates a benefit’ / ‘invalid’ / ‘scholars’ vs ‘a loan which has generated a profit’ / ‘unsound’ / ‘Ulema’), and the closing invocation (official ‘Indeed, Allāh is All-Knowing.’ vs IRTI ‘Allah knows best.’). ONE SUBSTANTIVE WORDING DIVERGENCE WORTH FLAGGING (reported, not smoothed): the description of the contract’s nature reads ‘the sale of a commodity … the purchaser returns to him the object of the sale’ in the official edition, but ‘the sale of money … the purchaser returns to him the amount purchased’ in the IRTI edition. The classical bay al-wafa is the sale of an ASSET (typically real estate) with a repurchase condition, so the official ‘commodity / object’ reading matches the contract’s well-known form; the IRTI ‘money / amount’ wording reads oddly for a sale and is best treated as a translation quirk — both are reported here verbatim rather than harmonised, because a careful reader deserves to see the divergence. ONE PRINT/OCR DEFECT DISCLOSED, NOT SILENTLY CORRECTED: the IRTI edition’s second ruling prints ‘this contact prohibited in Shari’a’ — ‘contact’ is a dropped-letter misprint for ‘contract’; the meaning (this CONTRACT is prohibited) is unambiguous from the official edition and the sentence itself, and it is flagged here rather than quietly fixed.
WHERE IT LANDS FOR A WESTERN MUSLIM. Bay al-wafa is not a product you will be offered by name — but its SHAPE is everywhere, and Res 66 gives you the X-ray. Whenever a deal amounts to ‘hand over your asset, take cash now, and get the asset back when you repay,’ ask the Academy’s question: is this really a loan, and is the other party taking a benefit from it in the meantime? A ‘sale-and-buyback’ of shares or gold engineered so you end up with cash now and a fixed larger sum owed later; a ‘home reversion’ where you sell your house cheaply for cash and rent it back; any ‘repurchase agreement’ whose real purpose is financing rather than a genuine transfer of ownership and risk — all of these invite the same test. If, once you strip the labels, what is left is a loan with a benefit flowing to the financier, then by the logic of Res 66 you are looking at riba wearing a sale’s clothing, however sophisticated the paperwork.
Wording inside quotation marks is quoted from the source. The rest is this notebook’s summary of it — read the original before relying on it.
Provenance
- Compiled from
- Compiled from TWO genuinely different English translations of the SAME primary resolution, cross-read 2026-07-11, every load-bearing quote machine-verified verbatim against both source PDFs (line-wrap and hyphenation aware, whitespace-normalised, 13/13 OK): [1] the INTERNATIONAL ISLAMIC FIQH ACADEMY (OIC) OFFICIAL ENGLISH EDITION, ‘Resolutions and Recommendations of the International Islamic Fiqh Academy’ (official edition, October 2021), printing the ruling as ‘Resolution No. 66 (4/7) / Bay al-Wafa (Selling with Repurchase Right)’; and [2] the IRTI/IDB PRINTED EDITION, ‘Resolutions and Recommendations of the Council of the Islamic Fiqh Academy 1985-2000’ (Islamic Research and Training Institute, Islamic Development Bank, Jeddah), printing it as ‘RESOLUTION N° 66/4/7 CONCERNING BAY’AL-WAFA (DEBT GUARANTEE SALE)’. Both editions carry the same 7th session (Jeddah, 7–12 Dhū al-Qi’dah 1412h / 9–14 May 1992), the same description of bay al-wafa’s true nature (a sale conditioned on hand-back once the price is returned), and the same two operative rulings (it is really a benefit-bearing loan and thus fraudulent riba invalid by the majority; the contract is prohibited).
- Source
- PRIMARY RULING (full title, session/city/dates, the preamble describing bay al-wafa’s true nature, and the full two-part operative text — First: this is in fact ‘a loan which generates a benefit,’ a fraudulent practice of riba, invalid by the majority of scholars; Second: the contract is not permissible in Shariah; plus the closing invocation) from [1] the INTERNATIONAL ISLAMIC FIQH ACADEMY (OIC) OFFICIAL ENGLISH EDITION, ‘Resolutions and Recommendations of the International Islamic Fiqh Academy’ (official edition, October 2021), printing it as ‘Resolution No. 66 (4/7) / Bay al-Wafa (Selling with Repurchase Right)’, ‘holding its 7th session in Jeddah, Kingdom of Saudi Arabia, on 7–12 Dhū al-Qi’dah 1412h (9–14 May 1992)’ — extracted verbatim from the published PDF (https://iifa-aifi.org/wp-content/uploads/2021/12/Resolutions-Recommendations-of-the-IIFA-Official-Edition-Oct-2021.pdf), read 2026-07-11. CONFIRMING SECOND, GENUINELY DIFFERENT TRANSLATION from [2] the IRTI/IDB PRINTED EDITION, ‘Resolutions and Recommendations of the Council of the Islamic Fiqh Academy 1985-2000’ (Islamic Research and Training Institute, Islamic Development Bank, Jeddah), printing the same ruling as ‘RESOLUTION N° 66/4/7 CONCERNING BAY’AL-WAFA (DEBT GUARANTEE SALE)’, same seventh session / Jeddah / 7–12 Dhul Qi’dah 1412H (9–14 May 1992), and the same two operative rulings — extracted verbatim from the published PDF (https://zulkiflihasan.wordpress.com/wp-content/uploads/2009/12/majma-fiqh.pdf), read 2026-07-11. THE TWO EDITIONS ARE GENUINELY DIFFERENT RENDERINGS that converge on the same verdict; genuine wording differences reported rather than smoothed: title ‘Bay al-Wafa (Selling with Repurchase Right)’ vs ‘BAY’AL-WAFA (DEBT GUARANTEE SALE)’; operative phrasing ‘a loan which generates a benefit’ / ‘invalid’ / ‘scholars’ (official) vs ‘a loan which has generated a profit’ / ‘unsound’ / ‘Ulema’ (IRTI); closing ‘Indeed, Allāh is All-Knowing.’ (official) vs ‘Allah knows best.’ (IRTI). ONE SUBSTANTIVE WORDING DIVERGENCE FLAGGED NOT HIDDEN: the nature clause reads ‘the sale of a commodity … the purchaser returns to him the object of the sale’ (official) vs ‘the sale of money … the purchaser returns to him the amount purchased’ (IRTI) — the classical bay al-wafa is the sale of an ASSET with a repurchase condition, so the official ‘commodity/object’ reading matches the contract’s known form and the IRTI ‘money/amount’ wording reads as a translation quirk; both reported verbatim, not harmonised. ONE PRINT/OCR DEFECT DISCLOSED: the IRTI second ruling prints ‘this contact prohibited in Shari’a’ — ‘contact’ is a dropped-letter misprint for ‘contract’; meaning unambiguous, flagged not silently corrected. Every verbatim quote used above was machine-checked against both source PDFs (line-wrap and hyphenation aware, 13/13 OK). Trust: high (two independent verbatim primary editions of the same OIC resolution).
- School / basis
- Comparative / transactional-law with a PRIMARY OIC collective-ijtihad ruling (bay al-wafa — a ‘sale’ conditioned on the seller’s right to reclaim the asset once he returns the price — is in reality ‘a loan which generates a benefit,’ hence a fraudulent practice of riba, invalid by the majority of scholars, and not permissible in Shariah). The resolution deliberately looks past the sale form to the loan substance; its own wording (‘the majority of scholars / Ulema’) concedes the contract had historical defenders without naming or tallying them, and Res 66 states no madhab count and cites no Qur’an verse or hadith number in its operative text. This is the site’s clearest single primary-source statement of the load-bearing maxim that a benefit taken on a loan is the riba — the same test applied concretely to bonds (Res 60), current accounts (Res 86 / Res 222), and rent-to-own (Res 44).
- Captured
- 2026-07-11
- Added
- 2026-07-11
- Trust
- Primary or near-primary source with a stable public URL.
Compiler’s note
Added 2026-07-11 (auto-run). Corpus’s TWENTY-THIRD primary-OIC anchor and the single cleanest primary-source statement of the site’s central maxim: a ‘sale’ that is really ‘a loan which generates a benefit’ is riba and is void. Res 66 (4/7), 7th session (Jeddah, 9–14 May 1992), addresses bay al-wafa — the ‘sell it to me, I hand it back whenever you repay the price’ arrangement — and looks past the sale form to find a benefit-bearing loan: First, it is ‘a loan which generates a benefit,’ hence a fraudulent practice of riba, invalid by the majority of scholars; Second, the contract is not permissible in Shariah. Primary-source basis for the recurring site rule that a benefit taken on a loan IS the riba regardless of the label — the same test the corpus applies to bonds (Res 60), current accounts (Res 86 / Res 222) and rent-to-own (Res 44), stated here at its most explicit. HONESTY built into the entry (not smoothed): the resolution says ‘the MAJORITY’ of scholars/Ulema, so the entry notes the contract had historical defenders and does NOT name/tally/reconstruct the minority view (Res 66 names none). GOLD-STANDARD pairing: two genuinely different English translations cross-read — the Academy’s OWN OFFICIAL ENGLISH EDITION (Oct 2021 PDF, ‘Selling with Repurchase Right’) + the IRTI/IDB printed edition (1985-2000, ‘Debt Guarantee Sale’), both pdftotext-verbatim, both carrying this 1992 resolution in full; wording differs in title, the operative phrasing (‘generates a benefit’/‘invalid’/‘scholars’ vs ‘has generated a profit’/‘unsound’/‘Ulema’) and the closing invocation, plus ONE flagged SUBSTANTIVE divergence in the nature clause (‘sale of a commodity … object of the sale’ vs ‘sale of money … amount purchased’ — official matches the contract’s known asset-sale form; IRTI reads as a translation quirk; both reported verbatim) and ONE disclosed IRTI print defect (‘this contact prohibited’ = dropped-letter misprint for ‘contract’; flagged, not silently corrected). All 13 load-bearing quotes machine-verified against both source PDFs (13/13 OK, whitespace/hyphenation aware). DROPPED per no-fab: madhab tally; vote count; Qur’an verse / hadith number (Res 66’s operative text cites none — including the well-known ‘every loan that draws a benefit is riba’ hadith, whose apparatus the resolution does not invoke, so it is not assigned one here); the specific classical jurists/regions that historically tolerated bay al-wafa (the resolution names none); any named product/bank; and any figure. Articles 86->87. Clean build + lint green. NEXT candidate (in both editions, finance-relevant, not yet covered): Res 45 (7/5) / Res 50 (1/6) on Real Estate Financing for Housing Construction and Purchase (directly on the site’s mortgage theme), or Res 78 (9/8) on Credit Cards; the post-2000 Res 137 (3/15) and Res 157/158 (17th session) still await a genuinely-different second source (IRTI 1985-2000 stops before the 17th session).
Topics
islamic-financeislamic-contract-lawribausuryhidden-interestriba-circumventionhiyallegal-artificebay-al-wafasale-with-repurchasedebt-guarantee-salebuybackrepurchase-agreementsecured-loanpawnrahncollateralloan-benefitqard-jarra-nafevery-loan-that-draws-a-benefit-is-ribasubstance-over-formvoid-contractprohibited-contracthome-reversionsale-and-leasebackres-44res-60res-86res-222oicinternational-islamic-fiqh-academyiifaresolution-664-77th-sessionjeddah1992primary-sourcecollective-ijtihad
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