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Fatwa CenterA bank taking commission on the warranty
Question
ALL PRAISE BE TO ALLAH AND PEACE BE UPON OUR PROPHET AND ALL HIS FAMILY? I WOULD LIKE FIRST OF ALL TO THANK YOU FOR THE EFFORT YOU ARE MAKING TO ADVISE US AND CLARIFY MANY MISCONCEPTION. I WANT TO BUY A CAR IN INSALMENT (TO AVOID GETTING A LOAN) BUT THE RESTRICTION DONE BY THE SELLER IS THAT THE BILL MUST BE WARRANTED BY A BANK WICH TAKE A COMMISSION OF 0.00125 APPLIED ON EACH AMOUNT OF INSALMENT MY QUESTION IS THIS TRANSACTION LEGAL? ESPECIALY FOR THE BANK TAKING VARIABLE FEES ON EACH INSALMENTS? THANK YOU IN ADVANCE.
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His slave and Messenger.
If by the expression the bill must be ‘warranted by a bank’ you mean that the bank is bound to pay the debt to the seller when it is due whether or not the customer had paid its value beforehand, then this transaction is a warranty and in principle it is permissible. However, according to the view of the majority of the scholars 
it is not permissible to take a commission on the warranty but it is permissible for the bank to take a fixed fee for its expenses and this did not happen in the above example.
However, if the bank pays on your behalf the installment when it is due and then it takes the amount from you more than what was paid, then this is clear Riba (interest and or usury), because in this case, the bank gave a loan to the client with an interest.
Allaah Knows best.
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