Credit Agreement - Appendix B (The Shariah Basis for the Standard)

Transcription

1. Shari ’ah Standard No. (37): Credit Agreement Appendix (B) The Shari’ah Basis for the Standard Shari’ah Basis for Charging a Fee for Preparation of the Credit Study The credit study is a detailed study on the financial and credit position of the client so as to facilitate assessment of his credit worthiness and ability to honor commitments. According to Shari’ah, this task as such can constitute a remunerable service apart from the financing contract. The institution can even stipulate a condition that the study should be prepared by a third party. Charging the client for the credit study is also justified by the fact that the benefit from the study is shared between the financier and the financed party, rather than confined to the former only. The fee for the study should not necessarily be equal to the actual cost of its preparation, since it is a service which can be performed independently within the contract. Therefore, the credit agreement fee is considered as a fee payable for the effort exerted in preparation of the study as an independent service, irrespective of its results. In this regard, the Shari’ah Board of Aayan Company for Leasing and Finance issued a Fatwa (Fatawa Aayan: 189), indicating permissibility of charging such fees. The text of that Fatwa runs as follows: “When the clients of Aayan Company wish to sign with Aayan Company permissible investment or financing contracts through Mudarabah, Musharakah or any other mode of financing, and if Aayan Company, for that purpose, needs to conduct a study on the financial status of these clients and their legal eligibility for concluding such contracts, it is permissible for Aayan Company to sign special contracts with these clients so that Aayan Company prepares the required study. For preparation of the study, Aayan Company may charge a fee to be paid by the clients on the basis of 938
2. Shari ’ah Standard No. (37): Credit Agreement the special contracts which should be completely separate from the financing and legal contracts pertaining to the deals in question. The prepared study should become the property of the client once he pays the cost of its preparation, and therefore Aayan Company should not deprive him the right of obtaining it. Aayan Company should handover the study to the client so that he can be able to use it in his deals with Aayan Company or with any other party”. 939