What is the ruling on obligating a borrower to donate money as a penalty for late payment, knowing that this money does not go into the account of the lending entity but rather to a charity, and that it is necessary to avert harm from the owner of the money? And does a financial transaction become permissible if the Murabaha contract stipulates a late penalty but it is not applied? And is a person in distress exempt from the ruling on the impermissibility of a penalty clause, and what is the criterion for distress?

The previous fatwa cautioned that Islamic banks must seek legitimate means to safeguard their rights and shareholders' funds from procrastination, such as guarantees, collateral, and pledges. As for ta'zeer (punishment) with money according to the Malikis, it is not permissible for delaying debt repayment, because it is a ta'zeer using money (bi al-mal) and not a ta'zeer involving money (fi al-mal). What is permissible according to them is ta'zeer involving money, such as with counterfeit goods and the like, which is a disciplinary measure for the deceiver and has no textual evidence supporting it. Scholars have agreed on the impermissibility of financial penalties. The ruling of prohibition does not change if the beneficiary of the fine is a party other than the lender, nor if the condition of the late payment fine is not practically applied. As for the extent of necessity that permits prohibited transactions, it has been explained previously.