RESOLUTION
No. (86/3/95)
CONCERNING
"BANK DEPOSITS (Bank
Accounts)"
Quote - The Council of the Islamic Fiqh
Academy, convened in its Ninth
Session in Abu Dhabi, State of the
United Arab Emirates, from 1 to 6 Dhul
Quida 1415 H (1 - 6 April,
1995);
Having examined the research papers forwarded to the
Academy on the subject
of "Bank Deposits (Bank
Accounts).
Having listened to the debate around the
subject
RESOLVES
First:Call deposits (current
accounts) whether at Islamic banks or
interest-based banks, are
considered as loans, from a Shari'a perspective,
since the bank
taking delivery of these deposits is answerable for their
safety
and bound Shari'a wise to returning them on call. The ruling
applicable to the loan is no way affected by the Bank's (the
borrowers)
solvency or otherwise.
Second:Bank deposits are of
two categories depending on the type of actual
banking
operations:
a)Deposits for which an interest is paid, as in the
case of interest-based
banks, being usury loans, are prohibited
(haram) whether they are call
deposits (current accounts) or term
deposits, notice-deposits, or savings
accounts.
b)Deposits
placed at banks which uphold in actual practice the rules of
Islamic
Shari'a through an investment contract for a profit share, are
considered as Mudharaba (Sleeping partnership) capital, and hence
are
subject to rules applicable to Mudharaba (Kiradh) in Islamic
Fiqh, one of
which is the non-permissibility for the Mudharib
(the Bank) to guarantee
the capital of the Mudharaba
transaction.
Third:The guarantee for call deposits (current
accounts) are imputable to
the debtors (the bank shareholders) as
long as they have exclusive benefit
of the profits deriving from
their investment. Depositors in investment
accounts are not
called upon to be associated in guaranteeing such current
accounts,
as they are associated neither in the borrowing nor in the
profits
due.
Fourth: Mortgaging deposits, call (current accounts) and
investment ones
alike is permissible, and mortgages against their
amounts can only take
place through an arrangement precluding the
account holder having access to
it for the whole mortgage period.
In case the bank operating the current
account is itself the
mortgage the amount must be transferred to an
investment account,
in such a way that the guarantee is no longer
applicable in view
of the conversion of the loan into a kiradh (Mudharaba,
i.e.sleeping
partnership) and the profits arising from the accounted are
credited
to the account holder so as to preclude the mortgage (Creditor)
from
deriving benefits from any appreciation in the mortgage
value.
Fifth:Retention on the accounts is permissible if the bank
and the customer
have so agreed.
Sixth:The norm as to the
legitimacy of dealings calls for trust and honesty
in disclosing
data in a manner that would eliminate any ambiguity or
deception,
and that would reflect reality and dovetail with the Shari'a
perspective. This is more of a duty for banks vis-a vis the
accounts they
run in view of their activity being linked to their
presumed credibility
and for the sake of avoiding to deceive the
parties concerned.
Allah know best Unquote
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