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What is the ruling on Murabaha as practiced by some Islamic banks—such as Zitouna Bank in Tunisia—given the existence of a penalty clause of 2% in case of failure to pay the installment, and is it permissible to deal with them to avoid usury?

1 min readAlso available in العربية

The murabaha transaction in the aforementioned bank cannot be judged without examining its terms and conditions. If the bank purchases the commodity and takes possession of it, then sells it to the customer on a murabaha basis, there is no objection. However, stipulating a late payment penalty is impermissible, as it is a form of usury (riba), and the need for rented housing does not justify engaging in a usurious transaction.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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