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Collateral For Credit Facilities
Is it permissible to grant credit facilities to clients in return for goods held as collateral at the bank’s own warehouses or in those of the client but under the bank’s supervision?
It is permissible for the bank to accept pledges from its clients with regard to goods they may desire to purchase from it on a deferred basis, with the condition that they use the deferred price as collateral for a period of time. The goods may then be released in parts according to the percentages paid for the period of deferment.

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