Commission for Balance Coverage
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The third question of Fatwa No. ( 8162 )
Q3: I have been dealing with one of the banks for a period of 4 years, and I requested them to cover the balance when the balance is not sufficient, on the condition that I pay it back as soon as possible, so they expressed their willingness to add a coverage commission of about 10% of the amount they covered
for the balance. I ask for clarification regarding this coverage: is it riba (usury or interest) or not, and is it permissible for me to deal with them? Knowing that I have not agreed to this idea until I get a satisfactory answer; because I fear the haram (forbidden) and the anger of Allah the Exalted.
A3: If the reality of the transaction is as you described, then it is explicit riba (usury or interest), and it is obligatory for you to avoid it; because it is one of the major sins.
Q3: I have been dealing with one of the banks for a period of 4 years, and I requested them to cover the balance when the balance is not sufficient, on the condition that I pay it back as soon as possible, so they expressed their willingness to add a coverage commission of about 10% of the amount they covered
for the balance. I ask for clarification regarding this coverage: is it riba (usury or interest) or not, and is it permissible for me to deal with them? Knowing that I have not agreed to this idea until I get a satisfactory answer; because I fear the haram (forbidden) and the anger of Allah the Exalted.
A3: If the reality of the transaction is as you described, then it is explicit riba (usury or interest), and it is obligatory for you to avoid it; because it is one of the major sins.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.