Accordingly, the Academy has resolved the following:

First: It is impermissible to charge a fee for the act of guaranteeing itself in a letter of guarantee—an amount that is customarily calculated on the basis of the sum guaranteed and the period of the guarantee—whether the letter is covered or uncovered.

Second: The administrative costs of issuing either type of letter of guarantee are permissible, provided they do not exceed the customary market rate. When full or partial cover is furnished, those actual tasks required to manage that cover may be taken into account when calculating the expenses of issuing the letter.

And Allah knows best.

Resolution of the Islamic Fiqh Academy on Uncovered Credit Cards: Resolution No. 108

The Council of the International Islamic Fiqh Academy, operating under the Organisation of the Islamic Conference, convened its twelfth session in Riyadh, Kingdom of Saudi Arabia, from 25 Jumada al-Akhirah 1421 AH to 1 Rajab 1421 AH (23–28 September 2000 CE).

Pursuant to Council Resolution No. 65/1/7 on financial markets with regard to the credit card, in which it postponed determining the card’s legal characterisation and ruling to a subsequent session;

And with reference to the Council’s tenth-session Resolution No. 102/4/10;

And after examining the papers submitted to the Academy on “uncovered credit cards,” listening to the discussions held by jurists and economists, and referring back to the definition of the credit card found in Resolution No. 63/1/7, from which the following definition of an uncovered credit card is derived:

A document issued by its issuer—the issuing bank—to a natural or juristic person (the card-holder