To what extent is it permissible for the bank to stipulate financial compensation for late payment of installments in a Murabaha contract, calculated based on the bank's average profits, with the matter subject to the oversight of the bank's Sharia Supervisory Board?
The fatwa we follow is that late payment penalties are absolutely impermissible, and it is not permissible to stipulate compensation for damages in a debt contract of this kind.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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