Some banks offer metals, such as iron or copper, to be sold in installments to their clients. They give the client the choice to sell either through the bank or the client receives the metal and sells it in whatever way he likes. Is this permissible? Thank you.

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.

If the bank purchased the metal, received it, and then sold it in installments, following the Muraabahah system, it is permissible. It is also permissible that the client receives the commodity and then sells it in whatever way he likes or authorizes an agent to do so, even if it was the seller.

There remains a point: is it permissible to authorize an agent or the seller to sell the commodity for him in case he has not received it yet? The answer is that this is impermissible because one of the conditions of concluding a sale is that the commodity must be received. Hakeem ibn Hizaam narrated that he said: “I said to the Messenger of Allaah, sallallaahu ‘alayhi wa sallam, ‘I execute sale transactions. So, which is permissible and which is impermissible for me among them?’ He replied, ‘When you buy something do not sell it until you receive it.’” [Ahmad Shu‘ayb Al-Arnaa’oot: Saheeh by virtue of corroborating narrations]

As long as the sale is not concluded, authorizing an agent is invalid. Al-Mutee‘i in his supplement to An-Nawawi's Al-Majmoo', said: “What is prohibited for the agent to execute for himself is prohibited for him to execute for another by way of agency.” This means that if the agent is not permitted to sell something for himself, he is also not permitted to sell it on behalf of another by way of agency.

We alert the questioner to the fact that if these banks are Riba-based, it is not permissible to deal with them.

Allaah Knows best.