Is dealing with an Islamic bank considered permissible, knowing that it charges a higher percentage (7%) compared to other banks (4%), and is this considered exploitation that would render it forbidden? And what should a person in dire need of a loan to build or renovate a home do, given the absence of charitable alternatives or the ability to borrow from individuals?

The difference in dealings between Islamic banks and usurious banks is clear, and we have clarified this difference in previous fatwas. Borrowing with usury to build or expand a house is impermissible, unless there is an extreme necessity that cannot be averted except through usurious borrowing. In such a case, it is permissible to take only what is necessary, based on Allah's saying: "And He has already explained to you what He has forbidden to you, except for that to which you are compelled." It is possible to build or expand a house through Islamic banks using what is known as parallel Istisna' (manufacturing contract).