Ethio telecom offer credit to his customer with rate of facility fee repayed at fixed date and also fee with daily charge. Is there a diffrence between the two term mean facility fee(service charge) and daily fee? Is that both are interest and prohibited such that i may in state of RIBA
“RIBA” in the Muslim religion is charging excessive interest, say 5% a month. Which would be illegal for example in totally non-Islamic German law as well. The difference is that Islam doesn’t set a fixed rate for what is legal and what is illegal, making basically any interest impossible.
Two things happen: First, by calling it a “fee” it’s not interest anymore and therefore becomes legal. Unless the fees are excessive. Ask any non-Muslim friend whether they think the fees are excessive. For example if your friend received a mortgage paying five percent interest a year, you can’t take that mortgage because it charges interest. A mortgage charging a five percent per year “fee” would be fine. A mortgage charging a five percent per month fee would be usury, and a Christian friend would call it that.
They are different names for essentially the same thing - a service fee for having a line of credit. For example, if you make use of an overdraft, the bank might charge a daily fee for the use of the overdraft facility on the account.
The important thing is that these fees are not interest. Interest is calculated as a percentage of the amount borrowed. This is a fixed fee for a service.