What is the ruling on making a deposit in an Islamic bank like Faisal Islamic Bank?
A "wadi'ah" (deposit) is something left with another for safekeeping without any disposition of it. This differs from a bank deposit, which the bank disposes of. Bank deposits are of two types:
1. Non-investment deposit (current account): This is a loan from the customer to the bank, permissible unless the bank is usurious, except in cases of necessity to preserve money and if no Islamic bank is available. 2. Investment deposit: Permissible forms: It should be a (profit-sharing) contract with the following conditions: The money is invested in permissible projects. The bank does not guarantee the capital unless it is due to its negligence. The profit is specified as a common percentage of the profit, not of the capital. Prohibited forms: Guaranteeing the capital while earning interest, which is a usurious loan. The bank investing the money in prohibited projects.
The Islamic Fiqh Academy has resolved that demand deposits are loans, and deposits on which interest is paid are prohibited usurious loans. As for investment deposits with -compliant banks under an investment contract for a share of the profit, they are Mudarabah capital subject to its rulings.
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