Analysis of information sources in references of the Wikipedia article "Islamic finance products, services and contracts" in English language version.
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The prevalent position, however, seems to be that creditors may impose penalties for late payments, which have to be donated, whether by the creditor or directly by the client, to a charity, but a flat fee to be paid to the creditor as a recompense for the cost of collection is also acceptable to many fuqaha.
The bank can only impose penalties for late payment by agreeing to 'purify' them by donating them to charity.
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