Regulatory Alerts2026-01-01
Fatwa of the Supreme Council of Islamic Jurisprudence on Regulated Tawarruq
The Supreme Council of Islamic Jurisprudence issued a fatwa permitting regulated tawarruq to address urgent financial needs while strictly prohibiting deceptive practices that violate Sharia principles. The ruling distinguishes between permissible tawarruq, which involves genuine commodity transactions without prior agreement to resell, and prohibited tawarruq, which relies on deception or pre-arranged buy-back schemes. To ensure compliance, the Council mandated that financial institutions implement transparent policies, conduct training, and adhere to specific Sharia governance standards.
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