Document Type : Research Article

Authors

• Gholam Ali Masouminiya ¹
• Amir Yazdan Parast ²

¹ Associate Professor, Department of Economics and Islamic Banking, Kharazmi University, Tehran, Iran

² Lecturer, Level 4 Seminary, Jurisprudence of Transactions, Seminary, Ahvaz, Iran

Abstract

Abstract

This study aims to demonstrate the applicability of the contract of deposit (wādīʿah) to current accounts within the Islamic banking system by examining the jurisprudential and legal nature of these deposits. Jurists and legal scholars have presented various views regarding the nature of current deposits, including classifying them as loans, complete or incomplete deposits, settlements, or new contracts. However, most jurists consider these deposits as loans to the bank due to the bank’s proprietary control over the funds and the return of equivalents instead of the exact deposited amounts.

This study adopts an integrative approach based on the dependence of the contract’s nature on the true intention and consent of depositors. Besides analyzing jurisprudential, legal sources, and banking laws, it reviews empirical data collected from over 700 depositors through questionnaires. The field results indicate that 87% of depositors place their funds with the intention of deposit and trust, and over 90% express dissatisfaction with the bank’s utilization of their funds. These findings demonstrate a clear inconsistency between depositors’ actual intent and the assumption of bank ownership and loan classification. Furthermore, banks generally utilize funds without full and informed consent from depositors.

The study further reveals that based on the analysis of the nature of fiat money and acceptance of the theory of bank money creation, banks do not exert proprietary control over current deposits. Accordingly, current deposits can be regarded as "complete deposits." Moreover, if the depositor grants the bank permission for non-proprietary use and consents to restitution by equivalent, the deposit constitutes an "incomplete or unconventional deposit." In cases where the applicability of the contract of deposit to current accounts is doubtful, the contract may be recognized as a new contract with a similar nature to deposit.

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Keywords

• Interest-free banking
• Islamic banking
• current account
• current deposit
• deposit (wādīʿah)
• incomplete deposit
• loan

Main Subjects

• Islamic Banking