All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
Having examined the provisions and the terminology of the above contract, We (Iftaa` Department) note the following:
First: It should be stated that the payment made by a participant is a donation, and We recommend stating this in Article (4A/1).
Second: Article (5/A/3) states: "(5%) of the zero-interest loans is among the resources of the Fund, however, it is safer to limit this clause by: " It shouldn`t be more than the actual cost of the needed administrative expenses, and it isn`t permissible to make any profit out of the latter."
Third: Article (3/16) states: "Obligations should be settled by recovering grants and loans taken from the Fund, and twenty five JDs should be deducted from the amount due.
There are two problems with this Article. First: How can the grants be recovered while are a gift, which became obligatory by holding? Second: What is the Sharia evidence on which the deduction of the twenty five JDs, from the one who has withdrawn from the Fund, was based?
Fourth: Article (17/D) stipulates a financial penalty. This isn`t permissible because it involves the suspicion of the forbidden penalty clause. Therefore, We recommend removing it. And Allah the Almighty knows best.