The imposition of compensation charges at actual loss based on the principle of compensation (ta’widh) on the defaulting party (any participant who does not honour its obligation(s) towards its counterparty as agreed upon) is permissible. The calculation of the actual loss is to be determined by the contracting party.

The imposition should be applicable in the event of insufficient collateral value to cover indebtedness and any other actual losses incurred by Approved Supplier (e.g. actual losses due to change of market price of the securities).

(Refer to: https://www.bnm.gov.my/documents/20124/66548/shariah_resolutions_2nd_edition.pdf)