Regulatory Alerts2026-01-01
Fatwa of the Supreme Council for Islamic Banking Regulation on Early Settlement Rewards
The Supreme Council for Islamic Banking Regulation (Kuwait) issues a fatwa permitting financial institutions to offer rewards or discounts when customers settle their Islamic financing contracts early. The ruling validates the classical 'discount and accelerate' (ضع وتعجل) principle, allowing a fixed or percentage-based reward not exceeding 1.5% of the financing cost, whether agreed upon before or after the due date. This fatwa aligns with juristic consensus and the public interest principle, ensuring early settlement reduces usury-related harm without constituting prohibited interest.
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