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Guarantee In Musharakah

In case of a Musharakah contract, is it permissible for the bank to require the client to submit guarantees?

Each partner in a Musharakah has the right to make use of the collective funds of the Musharakah in a way that is of benefit to partners. Therefore, in general, no partner may be held liable for any loss that accrues from a transaction that partner entered into, unless it is established that the partner acted with negligence or committed fraud.

Therefore, the bank may require a guarantee from its client but only to the extent of fraud or negligence on the part of the client. In pursuance of such a guarantee, it will be permissible for a bank to require collateral from its client, provided that the collateral will remain in the possession of the client, with the bank having a claim on it.

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