Does the guaranteeing of deposits, especially long-term ones, invalidate the legitimacy of the Shar'i Mudarabah contract between the depositor and the bank, rendering its profits unlawful?
The Islamic bank's guarantee of capital affects the contract. The Islamic Fiqh Academy has stipulated that it is impermissible to include in the prospectus or Mudarabah a clause guaranteeing the Mudarib (entrepreneur) the capital or a fixed profit. If such a condition exists, it invalidates the contract, and the Mudarib is entitled to a profit equivalent to the customary Mudarabah (Mudarabah al-mithl). However, if the contract includes a capital guarantee and the bank works with it and profits, then the profit is not unlawful. It belongs to the capital provider and the worker (the bank) receives a customary fee (ujrat mithl) or a customary share (qirad mithl).
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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