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What is the ruling on investment deposits in Islamic banks if the bank informs the client that the profit is chosen before the deposit based on the amount and period, and that the investment areas include Ijara Muntahia Bil Tamleek (leasing ending in ownership) and Islamic Murabaha, and the client is a Mudarib (investor) exposed to profit and loss, and that the bank does not guarantee profit, but in case of loss, it may offer a "gift" to the client to compensate for the loss and encourage them to continue, noting that this gift is not contractually binding on the bank?

1 min readAlso available in العربية

If the bank compensates a client for their loss after the contract purely as a voluntary act, this is a benevolent act and there is no harm in it. However, stipulating this in the contract, or voluntarily offering it at the time of its execution, is impermissible; because it transforms the investment contract into a loan that yields a benefit. Therefore, it is not permissible to stipipulate an absolute guarantee on the investment manager, nor for him to voluntarily offer it at the time of the contract, nor for him to commit to the guarantee after the contract explicitly or implicitly. However, he is permitted to voluntarily offer the guarantee upon the occurrence of total or partial loss, purely out of his own will. It is a condition for the protection of capital and investment that its purpose not be to hold the investment manager liable except in cases of his transgression, negligence, or violation of the terms, and that the means not involve an unlawful contract.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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