The primary-source rule Resolution 50 leans on: a loan may recover its real handling cost and NOT a penny more — any surplus, whatever you call it, is riba.
The primary-source rule Resolution 50 leans on: a loan may recover its real handling cost and NOT a penny more — any surplus, whatever you call it, is riba. International Islamic Fiqh Academy (OIC), Resolution No. 13 (1/3), titled ‘Answering the Questions of the Islamic Development Bank’ in the Academy’s official English edition and ‘Concerning Questions Submitted by the Islamic Development Bank (IDB)’ in the IRTI/IDB edition, adopted at the 3rd session (Amman, Hashemite Kingdom of Jordan, 8–13 Ṣafar 1407h / 11–16 October 1986). Section A is the load-bearing gem: ‘It is permissible to charge a fee for loan-related services. The said fee should be within the limit of the actual expenses’ — and ‘Any fee in addition to the actual service-related expenses is prohibited because it is considered as ribā (usury).’ This is exactly the rule Resolution No. 50 (1/6) cites when it forbids housing banks from smuggling interest back in ‘under the name of service charges.’ Section E adds the other on-theme rule most people miss: interest a bank unavoidably earns on foreign deposits may NOT be used or kept — it must be ‘spent on general welfare.’ Sections B and C are the Academy’s earliest (1986) blessing of the promise + agency + separate-contract-after-possession machinery that the later murābaḥa (Res 40/41) and lease-to-own (Res 110) resolutions build upon.
What this source says
THIS IS THE RULE THE HOUSING RESOLUTION LEANS ON. When Resolution No. 50 (1/6) forbids a housing bank from charging interest and then adds that you cannot hide interest ‘under the name of service charges,’ it is not inventing that limit on the spot — it is pointing back to this resolution. Resolution No. 13 (1/3), from the Academy’s 3rd session in Amman (11–16 October 1986), is where the Fiqh Academy first drew the line between a genuine service fee on a loan and disguised interest. It reads as a set of answers to operational questions the Islamic Development Bank put to the Academy, but two of those answers are load-bearing for the whole subject of this site.
SECTION A — THE COST-ONLY RULE (the gem). Verbatim (official edition): ‘1. It is permissible to charge a fee for loan-related services. The said fee should be within the limit of the actual expenses. 2. Any fee in addition to the actual service-related expenses is prohibited because it is considered as ribā (usury).’ Read those two sentences together and you have the complete test. A lender MAY recover what it actually costs to administer a loan — the paperwork, the transfer, the genuine handling expense. A lender may NOT charge a rupee, dollar or dirham above that real cost, and the label on the surplus is irrelevant: call it a ‘service charge,’ an ‘arrangement fee,’ a ‘facility fee’ or an ‘administration charge,’ and if it exceeds actual expense it is riba. This is the primary-source engine behind the corpus’s recurring warning: when a ‘fee-based’ or ‘interest-free’ loan quietly recovers more than its handling cost, the ‘fee’ is the interest.
SECTION E — WHAT TO DO WITH INTEREST YOU CANNOT AVOID (the second gem). A bank that must hold deposits in conventional foreign banks will have interest credited to it whether it wants it or not. What then? Verbatim (official edition): ‘It is prohibited on the Bank to use the interests earned on its deposits in foreign banks to protect the actual value of its assets from the effects of currency fluctuation. Therefore, the said interest amount should be spent on general welfare, such as training, research, helping those in need, and providing financial and technical assistance to Member states.’ Two things are settled here. First, you may not put the interest to your own benefit — not even for the ostensibly defensive purpose of protecting your capital against inflation or currency movements. Second, the interest is not simply left in the account; it is disbursed to general welfare. This is the primary-source shape of the discipline every Muslim with an unavoidable interest-bearing account meets in practice: the interest is purified by giving it away to public benefit, and it is not kept, spent on oneself, or used as a hedge.
SECTIONS B & C — THE MACHINERY EVERYTHING ELSE INHERITS. The bank asked the Academy whether it could promise a client a lease (B) or an installment sale (C) of equipment it did not yet own, appoint the client as its buying agent, and then contract with him. The Academy answered yes, under strict sequencing. Verbatim (official edition, lease): ‘First: The IDB’s promise to lease the equipment to the client, after it has owned it, is acceptable according to Shariah.’ And the sequencing rule that makes it lawful rather than a paper trick: ‘The lease agreement should be implemented after the actual acquisition and possession of the equipment and should be in a separate contract than the agency contract or the promise.’ The identical structure is blessed for a future installment sale in Section C: ‘The IDB’s promise to sell the equipment to the client, after it has owned it, is acceptable according to Shariah.’ Three conditions run through both: (1) a promise is allowed but is not itself the sale/lease; (2) the client may be appointed as the bank’s purchasing agent, though ‘it is preferable that the purchasing agent be different from the beneficiary client if this condition can be easily met’; and (3) the actual lease or sale must be a separate contract, concluded only after the financier has genuinely acquired and taken possession of the asset. That is the exact skeleton the later, more famous resolutions flesh out — the binding murābaḥa promise (Res 40/41) and lease-ending-in-ownership / ijārah muntahia bittamlīk (Res 110). Resolution No. 13, in 1986, is where it starts.
WHY THIS MATTERS FOR EVALUATING A REAL PRODUCT. Put the three rules to work on any ‘Islamic’ or ‘interest-free’ product. (a) Cost-only: does the ‘fee’ recover genuine administrative cost, or is it a percentage of the amount financed dressed as a service charge? If it scales with the loan size and duration rather than the actual work, it is behaving like interest. (b) Real possession: in a murābaḥa or ijārah, did the financier actually own and possess the asset before selling or leasing it to you, under a separate contract — or did the ‘sale’ and the ‘promise’ collapse into one instantaneous paper step with no real ownership in between? (c) Purification: interest that lands in an account you could not avoid is given away to public benefit, not pocketed. All three tests trace to this single 1986 resolution.
GENUINE DIFFERENCES BETWEEN THE TWO EDITIONS (disclosed, not smoothed). The two translations diverge in wording throughout while agreeing completely on substance. The title differs — ‘Answering the Questions of the Islamic Development Bank’ (official) versus ‘Concerning Questions Submitted by the Islamic Development Bank (IDB)’ (IRTI). Section A opens ‘It is permissible to charge a fee’ (official) versus ‘It is allowed to charge a fee’ (IRTI), and where the official edition reads ‘is prohibited because it is considered as ribā (usury),’ the IRTI edition inserts the gloss ‘is prohibited (haram) because it is considered as Riba (usury).’ In Section B the fourth clause reads ‘The promise to give away the equipment at the end of the lease period’ (official) versus ‘The promise to donate the equipment’ (IRTI). Section E reads ‘It is prohibited on the Bank to use the interests earned on its deposits’ and ‘protect the actual value of its assets’ and ‘helping those in need … Member states’ (official) versus ‘It is forbidden for the Bank to use the interests generated by its deposits’ and ‘protect the real value of its assets’ and ‘helping those in calamity … member countries’ (IRTI). The closing invocation is ‘Indeed, Allāh is All-Knowing.’ (official) versus ‘Verily, Allah is All-Knowing’ (IRTI). DISCLOSED OCR/TYPOGRAPHY QUIRKS IN THE IRTI PRINT, NOT SILENTLY CORRECTED: the IRTI edition renders the Section B heading with mismatched guillemets (‘Regarding «Lease Transactions»’), prints ‘deliberate tempering’ for ‘deliberate tampering,’ and carries scattered stray apostrophes/commas typical of its scan — none of which touches the meaning, and all of which are flagged here rather than quietly cleaned.
AN HONEST NOTE ON WHAT IS AND IS NOT HERE. Resolution No. 13 is framed as answers to a specific institution’s questions, and this entry does not inflate it into a general treatise: Sections B, C and D are the IDB’s operational lease/sale/trade-finance queries, and it is the promise-agency-possession MACHINERY in them (not any IDB-specific detail) that generalised into the later resolutions. Section A’s cost-only rule and Section E’s purification rule are the two that stand fully on their own and that the site relies on. The resolution’s operative text cites no Qur’an verse and no hadith number, so this entry assigns it none — including the well-known ‘every loan that draws a benefit is riba’ report, whose apparatus the resolution does not invoke. It records no madhab tally and no vote count, so none is reported. It names no figure, and the only institution it names is the IDB itself (whose questions it is answering). The mapping of Sections B and C onto modern murābaḥa (Res 40/41) and ijārah muntahia bittamlīk (Res 110) is this site’s analytical framing — the corpus’s own commentary — not language the resolution uses.
Wording inside quotation marks is quoted from the source. The rest is this notebook’s summary of it — read the original before relying on it.
Provenance
- Compiled from
- Compiled from TWO genuinely different English translations of the SAME primary resolution, cross-read 2026-07-12, every load-bearing quote machine-verified verbatim against both source PDFs (line-wrap and hyphenation aware, whitespace-normalised, 21/21 OK): [1] the INTERNATIONAL ISLAMIC FIQH ACADEMY (OIC) OFFICIAL ENGLISH EDITION, ‘Resolutions and Recommendations of the International Islamic Fiqh Academy’ (official edition, October 2021), printing it as ‘Resolution No. 13 (1/3) / Answering the Questions of the Islamic Development Bank’; and [2] the IRTI/IDB PRINTED EDITION, ‘Resolutions and Recommendations of the Council of the Islamic Fiqh Academy 1985-2000’ (Islamic Research and Training Institute, Islamic Development Bank, Jeddah), printing it as ‘RESOLUTION N° 13 (1/3) CONCERNING QUESTIONS SUBMITTED BY THE ISLAMIC DEVELOPMENT BANK (IDB)’. Both editions carry the same 3rd session (Amman, 11–16 October 1986), the same five lettered sections (A service fee for loans; B lease transactions; C future sales on installments; D foreign trade financing; E interest earned on foreign deposits), the same core holdings (a loan fee is capped at actual cost, any surplus is riba; interest earned on unavoidable foreign deposits must be spent on general welfare) and the same lease/sale machinery (a binding promise, an agency to purchase, and a separate contract entered into only after the bank has actually acquired and taken possession of the asset).
- Source
- PRIMARY RULING (full title, session/city/date, the five lettered sections A–E in full — the cost-only loan-fee rule of Section A and the riba characterisation of any surplus; the lease and future-sale promise/agency/separate-possession machinery of Sections B and C; the foreign-trade-financing principle of Section D; the interest-purification rule of Section E; and the closing invocation) from [1] the INTERNATIONAL ISLAMIC FIQH ACADEMY (OIC) OFFICIAL ENGLISH EDITION, ‘Resolutions and Recommendations of the International Islamic Fiqh Academy’ (official edition, October 2021), printing it as ‘Resolution No. 13 (1/3) / Answering the Questions of the Islamic Development Bank’ (3rd session, Amman, Hashemite Kingdom of Jordan, 8–13 Ṣafar 1407h / 11–16 October 1986) — extracted verbatim from the published PDF (https://iifa-aifi.org/wp-content/uploads/2021/12/Resolutions-Recommendations-of-the-IIFA-Official-Edition-Oct-2021.pdf), read 2026-07-12. CONFIRMING SECOND, GENUINELY DIFFERENT TRANSLATION from [2] the IRTI/IDB PRINTED EDITION, ‘Resolutions and Recommendations of the Council of the Islamic Fiqh Academy 1985-2000’ (Islamic Research and Training Institute, Islamic Development Bank, Jeddah), printing it as ‘RESOLUTION N° 13 (1/3) CONCERNING QUESTIONS SUBMITTED BY THE ISLAMIC DEVELOPMENT BANK (IDB)’, same 3rd session and dates, same five sections and same core holdings — extracted verbatim from the published PDF (https://zulkiflihasan.wordpress.com/wp-content/uploads/2009/12/majma-fiqh.pdf), read 2026-07-12. THE TWO EDITIONS ARE GENUINELY DIFFERENT RENDERINGS that converge on the same rulings; genuine wording differences reported rather than smoothed: the title (‘Answering the Questions of the Islamic Development Bank’ vs ‘Concerning Questions Submitted by the Islamic Development Bank (IDB)’); Section A (‘It is permissible to charge a fee’ vs ‘It is allowed to charge a fee’; ‘prohibited because it is considered as ribā (usury)’ vs ‘prohibited (haram) because it is considered as Riba (usury)’); Section B fourth clause (‘promise to give away the equipment’ vs ‘promise to donate the equipment’); Section E (‘prohibited on the Bank to use the interests earned … protect the actual value … helping those in need … Member states’ vs ‘forbidden for the Bank to use the interests generated … protect the real value … helping those in calamity … member countries’); and the closing invocation (‘Indeed, Allāh is All-Knowing.’ vs ‘Verily, Allah is All-Knowing’). DISCLOSED IRTI OCR/TYPOGRAPHY QUIRKS, NOT SILENTLY CORRECTED: mismatched guillemets on the Section B heading (‘Regarding «Lease Transactions»’), ‘deliberate tempering’ for ‘deliberate tampering,’ and scattered stray apostrophes/commas typical of the scan — none affecting meaning. Every verbatim quote used above was machine-checked against both source PDFs (line-wrap and hyphenation aware, 21/21 OK). Trust: high (two independent verbatim primary editions of the same OIC resolution).
- School / basis
- Comparative / transactional-law with a PRIMARY OIC collective-ijtihad ruling. Resolution No. 13 (1/3), 3rd session (Amman, 11–16 October 1986), answers the Islamic Development Bank’s operational questions in five lettered sections. The two load-bearing holdings: (A) a fee for loan-related services is permissible only up to the loan’s ACTUAL expenses, and any surplus above actual cost is prohibited riba regardless of what it is called — the primary-source rule Resolution No. 50 (1/6) invokes to forbid hiding interest ‘under the name of service charges’; and (E) interest a bank unavoidably earns on conventional foreign deposits may NOT be used or kept (not even to hedge currency/inflation) but must be spent on general welfare — the primary-source shape of interest-purification. Sections B (lease) and C (future installment sale) bless, under strict sequencing, the machinery of a non-binding-in-form promise + a purchase agency + a separate contract concluded only after the financier’s actual acquisition and possession — the 1986 ancestor of the later murābaḥa (Res 40/41) and ijārah-muntahia-bittamlīk (Res 110) frameworks. Res 13’s operative text cites no Qur’an verse, no hadith number, no madhab count and no vote, so none is reported here. Honest scope: it is an ‘answering the questions’ resolution addressed to a specific bank; Section A’s cost-only rule and Section E’s purification rule stand on their own, while B/C/D are IDB-operational and it is their generalisable machinery, not any IDB-specific detail, that matters.
- Captured
- 2026-07-12
- Added
- 2026-07-12
- Trust
- Primary or near-primary source with a stable public URL.
Compiler’s note
Added 2026-07-12 (auto-run). The primary-source rule the just-added Resolution No. 50 (1/6) leans on: Resolution No. 13 (1/3), 3rd session (Amman, 11–16 October 1986), answering the Islamic Development Bank’s questions. TWO load-bearing gems. GEM 1 (Section A): ‘It is permissible to charge a fee for loan-related services. The said fee should be within the limit of the actual expenses’ and ‘Any fee in addition to the actual service-related expenses is prohibited because it is considered as ribā (usury)’ — the exact rule Res 50 invokes to forbid hiding interest ‘under the name of service charges’; a loan fee is lawful only up to real handling cost, any surplus is riba whatever the label. GEM 2 (Section E): interest a bank unavoidably earns on foreign deposits may NOT be used or kept (not even to hedge currency/inflation) but ‘should be spent on general welfare’ — the primary-source shape of interest-purification (give it away to public benefit, don’t pocket or use it). GEM 3 (Sections B & C): the Academy’s earliest (1986) blessing of the promise + purchase-agency + separate-contract-after-actual-possession machinery, the ancestor of the later murābaḥa (Res 40/41) and ijārah-muntahia-bittamlīk (Res 110) frameworks. WHY IT EARNS its place: no dedicated Res 13 article existed (it was only cross-referenced by Res 50, Res 110 and others); adding it completes the reference chain and gives three of the site’s working tests a single primary-source home. HONESTY built in: it is an ‘answering questions’ resolution addressed to a specific bank — Section A’s cost-only rule and Section E’s purification rule stand alone, while B/C/D are IDB-operational and it is their generalisable machinery, not any IDB-specific detail, that matters; the murābaḥa/ijārah mapping is flagged as the site’s own analytical framing. GOLD-STANDARD pairing: two genuinely different English translations cross-read — the Academy’s OWN OFFICIAL ENGLISH EDITION (Oct 2021 PDF) + the IRTI/IDB printed edition (1985-2000), both pdftotext-verbatim, both carrying the resolution in full. Genuine divergences reported: title variants; ‘permissible’ vs ‘allowed’; IRTI’s inserted ‘(haram)’ gloss; ‘give away’ vs ‘donate’; ‘interests earned … actual value … those in need … Member states’ vs ‘interests generated … real value … those in calamity … member countries’; ‘Indeed, Allāh is All-Knowing.’ vs ‘Verily, Allah is All-Knowing’. Disclosed IRTI OCR quirks: mismatched guillemets on the Section B heading, ‘tempering’ for ‘tampering,’ stray scan punctuation — none affecting meaning. All load-bearing quotes machine-verified against both source PDFs (21/21 OK, whitespace/hyphenation aware). DROPPED per no-fab: Qur’an verse / hadith number (Res 13’s operative text cites none, including the ‘every loan that draws a benefit is riba’ report); madhab tally; vote count; any figure; any named product/bank beyond the IDB (whose questions the resolution answers); and the CONTENT of cross-referenced Res 40/41/50/110 beyond the structural links. Articles 88->89. Clean build + lint green. NEXT candidate (in both editions, finance-relevant, not yet covered): a substantive Zakāh resolution (e.g. Res 28 (3/4) Zakāh on debts, or Res 143 style if pre-2000) or Res 51 (2/6) installment sales (the deferred-price ruling Res 50 substitute (b) cites); the post-2000 Res 137 (3/15) and Res 157/158 (17th session) still await a genuinely-different second source (IRTI 1985-2000 stops before the 17th session).
Topics
islamic-financeislamic-contract-lawribausuryqardloaninterest-free-loanservice-feeservice-chargeactual-costcost-only-loanservice-charge-anti-circumventionhidden-interestarrangement-feeinterest-purificationpurification-of-interestharam-income-disposalgive-to-charitycurrency-fluctuationinflation-hedgemurabahabinding-promisewakalaagencyconstructive-possessionactual-possessionseparate-contractijarahlease-to-ownijarah-muntahia-bittamlikdeferred-saleinstallment-saleislamic-development-bankidbres-13res-40res-41res-50res-110oicinternational-islamic-fiqh-academyiifaresolution-131-33rd-sessionamman1986primary-sourcecollective-ijtihad
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