Permissibility Of Services Charges Against Loan In Islamic Finance

Abstract

A question that is frequently asked is the collection of service charges on loan disbursal. Some people are in favor of their recovery and some are against it. In this regard, there are clear instructions of the Shari'ah in the light of which this question can be answered. This article will examine the cases in which service charges can be charged and in which cases they cannot. It will also be reviewed as to which entities, depending on their objectives, may be allowed to receive their direct expenses and which may not. In the same way, the aspects of justification and illegitimacy of ‘Time multiple counter loans’ will also be examined.