An Islamic bank has a charity fund which is comprised of Zakat (obligatory charity)‎ from the bank’s shareholders (at 2.5 % per year)‎, expunged income (income earned by the bank in certain transactions

Fatawa Question

An Islamic bank has a charity fund which is comprised of Zakat (obligatory charity) from the bank’s shareholders (at 2.5 % per year), expunged income (income earned by the bank in certain transactions which were declared non-Shariah compliant by the bank’s Shariah Board) and delay penalties imposed on defaulters of Murabahah and other financing by the bank but are donated to charity as per bank’s rule. Shariah guidance is sought as to whether it is allowed for the Islamic bank to use the charity fund to settle bank liabilities of the indebted persons who are not in a position to do so on their own, including the bank’s own customers. The liabilities are unpaid conventional and Islamic bank debts.

Fatwa

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Publisher

Islamic Finance News

Publication Date

2013-06-19

Country of Publication

Malaysia

Main Subjects

Economics & Business Administration
Islamic Studies

Data Type

Fatawa

Language

English

Record ID

BIM-784616

• APA
• MLA
• AMA