GUARANTEE FEES AND ISLAMIC FINANCE: WHAT IS THE BASIC ISSUE??
Islam prohibits charging of interest for money lending if such is contractually made compulsory on a borrower and as such has made it very clear that payment and receipt of interest made compulsory based on contracts between the two parties is prohibited. However the borrower is allowed out of his own accord without compulsion to pay more than what he had borrowed from the lender as a token of gratitude for the kindness rendered. Money lending must always be treated as a benevolent contract in Islam that its shall carry no interest charges.