Question:
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?
Answer:
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.