Arabic (بيع الدين) for sale of debt (dayn). It denotes the sale of debt securities, debt certificates (commercial papers), or receivables for a specific amount (usually at a discount to its face value). For example, it may involve the situation where a person has receivables and wants to sell them at a discount to a third party. The third party will replace the original creditor/lender and will be able to claim the face value, with the difference between what he will get and what he has paid constituting his reward/ profit (iwadh/ ribh).
The traditional Muslim jurists (fuqaha) unanimously prohibited ba’i al-dayn at a discount. The overwhelming majority of contemporary Muslim scholars hold the same view. However, some East Asian scholars (in Malaysia, for example) don’t consider ba’i al-dayn unlawful, based on the Shafi’i’s ruling allowing it (however, Shafi’i’s allowed it only if a debt is sold at its face value).
Shari’ah prohibits ba’i al-dayn because it involves a high degree of gharar (excessive gharar/ gharar fahish) and riba.
Comments