The bank (principal) organizes some joint financing projects and invites other Islamic banks to participate in the capital subscription process. It is customary to charge a participation fee of any bank that wants to take part in the joint financing venture. What is the rule regarding that fee?
It is not permissible in Islamic law to charge a fee to participate in joint financing because it is tantamount to charging a fee to engage in a contract. It does not qualify as a fee charged for the actual effort of organizing the project.
Issuer: Arab Banking Corporation Islamic Bank.