I work in a private institution and my work requires me sometimes to arrange a letter of credit from the bank (I do that at the Raajihi Bank and sometimes at al-Ahli Bank). This is one of the conditions of submitting bids for government contracts… My question is, is getting a letter of credit from the bank permissible or not?.
Praise be to Allaah.
Letters of credit from the bank are subject to further discussion:
1.
If it is completely covered by the customer, there is nothing wrong with the bank taking a fee from the customer, because this comes under the heading of appointing someone to act on one’s behalf, and acting on someone’s behalf in return for a fee is permissible, just as it is also permissible to do so for free. Continue reading