Question
ABSA Bank is offering an interest-free loan. The only charges are an initiation fee of 10% and 14% Vat. Is it permissible to make use of this service?
Answer
The 'initiation' fee and the vat on the loan are in fact riba, hence obtaining this loan is not permissible. Nowadays riba is described in various ways. Shares, dividends and 'initiation' charge, etc. are all birds of the same feather.
- Source
- themajlis.co.za
- Published in
- The Majlis Vol 20 No 06
- PDF page
- 4
Appears under Questions and Answers (approximate).