Is the bank guarantee required for submitting bids in government tenders (at Al-Rajhi Bank or AlAhli Bank) permissible?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
Regarding bank guarantees (letters of guarantee):
1. If it is fully covered by the client, the bank may take a fee for it, as it falls under the category of agency for a fee. 2. If it is not fully covered, the bank is not permitted to take a fee in exchange for the guarantee, because it is a gratuitous contract (contract of donation), and taking a fee would transform it into a loan that yields benefit, which is Islamically prohibited. 3. The bank may take actual administrative expenses for issuing the letter in both cases.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/19369
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 19369
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy