RIYADH: The Agricultural Development Fund (ADF) has come up with a new regulation imposing a fee on loans to its beneficiaries.

However, the General Presidency for the Fatwa Standing Committee said that no fees on loans should be imposed.

“The ADF is not allowed to impose a financial charge on agricultural loans or their collection,” the fatwa committee said.

The ADF, which was created by a royal decree, is a public credit institution specializing in providing financial assistance for various agricultural activities in all regions of the Kingdom.

“Imposing fees on loans granted to beneficiaries of the ADF is considered usurious,” the fatwa committee said.

The committee made the announcement after it received and studied a certified copy of the circular on the imposition of duties on loans from the ADF.

It added that taking fees to postpone scheduling of payment is also not permissible and was not considered when extending assistance for agricultural activities was decided.

“The reason for this is that it is against the Holy Qur’an," the fatwa committee added.

In a statement, the ADF said that the fees are in return for services provided to beneficiaries and to offset part of administrative expenses.

“The service fee is also imposed to ensure the continuation of services to the beneficiaries,” the ADF said.

It added that the fee is not intended to achieve any profit for the agricultural development organization but to ensure that it continues to function as envisioned when it was created.