When a bank cancels a dead borrower's loan: what of the person he borrowed for?

A question from someone for whom another man took a loan from an interest-based bank and then died, with insurance paying off the debt, in which Jordan's General Iftaa Department answered that the ruling depends on how the two were related. ¹

The questioner said a man borrowed a sum for him from an interest-based bank and then died, and insurance paid the debt on his behalf; he asked whether he still owed the man or whether the debt had fallen away. ¹

The Department first said that borrowing on interest is forbidden and a grave sin, and that anyone who has done so must sincerely repent. ¹ It then distinguished two cases. In the first, the questioner appointed the deceased as his agent to borrow for him: this is agency, since the agent did not borrow for himself but for his principal, who is the real borrower, and an agent's acts serve the principal's interest, as Taj al-Din al-Subki stated; so if the bank cancelled the loan for the agent, it is cancelled for the principal, who owes nothing further to the heirs. ¹ In the second, the questioner asked the deceased for a loan without specifying its source, and the deceased borrowed from the bank and lent it on: these are two separate contracts, and the bank's cancellation of its loan does not cancel what the questioner owes the deceased. ¹ It referred to an earlier decision of its Iftaa Council, no. 251 of 2018, on a similar case. ¹

Jordan's General Iftaa Department published this fatwa on aliftaa.jo as no. 3805, dated 19 September 2023. ¹ The museum records this text as a historical document attributed to the body or scholar that issued it; it issues no ruling of its own.