DEPOSIT PRODUCTS

Firman Pribadi
DEPOSIT PRODUCTS

 Current Account (Wadiah/Qard) Deposit

 Debit and Charge Card
 Savings (Wadiah/Mudaraba) Deposit
 Investment (Mudaraba) Deposits
 General Investment Deposits
 Special Investment Deposit
 Limited and Unlimited Period Investment
Deposits
 Issues in Product Management
 Gifts in Wadiah and Qard
 Guaranteed Return in Mudaraba
Current Account
(Wadiah/Qard) Deposit
 Safekeeping of one’s deposits, product ex: Cheque  feature
product : checking facility, automated-teller-machine cards,
traveler’s cheques, telephone banking, branch service, etc
 Free of Cost
 wadiah-wad-dhamanah or guaranteed deposits  Under this
mechanism, the deposits are held as amana or in trust and
utilized by the bank at its own risk
 The term “wadiah account” or “trust account” is used for this
deposits.
 Another view is to treat these deposits as qard ("qard hasan
current account“) or benevolent loan by the depositor  the
bank is free to utilize these funds at its own risk.
Debit and Charge Card
 Credit card encourages wasteful
consumption (buy now, pay later)
 Islamic alternative to a credit card is a
debit card or a charge card that is
essentially a mechanism of withdrawal of
one’s own funds deposited with an Islamic
bank  a tool of discipline in personal
expenditure
Savings (Wadiah/Mudaraba)
Deposit
 Popular in South East Asian countries
 The principal amount of deposit is guaranteed
 The bank guarantees the withdrawal of funds
from this account anytime
 provides a return to the depositor as a gift
 The gift is not part of the contract
 the purpose of this product is safecustody
with a moderate return
Investment (Mudaraba)
Deposits
 The core deposit product of an Islamic
bank
 The product is based on the concept of
mudaraba  Profit and Loss Sharing
(PLS)
General Investment
Deposits
 This is a popular deposit product of Islamic
banks under which an investment pool is
established. The pool includes investment
deposits of different maturities. The funds are
not tied to any specific investment project but
are utilized in different and continuous
financing operations of the bank. Profits are
calculated and distributed at the end of the
accounting period, which is either three
months, six months or one year.
Special Investment
Deposit
 This deposit account is similar in all respects to
General Investment Deposit except that the depositor
should meet the required minimum to invest in this
product. For instance, the bank may selectively
accept deposits from the government and / or the
corporate customer. The modes of investment of the
funds and the ratio of profit distribution may usually
be individually negotiated. The product provides the
bank with specific authorization to invest in a
particular project or trade and the profits of this
particular project only are distributed between the
bank and its customers according to mutually agreed
terms and conditions.
Limited and Unlimited Period
Investment Deposits
 As the name suggests, investment deposits under the
former are accepted for a specified period, which is
mutually determined by the depositor and the bank.
The contract terminates at the end of the specified
period but profits are calculated and distributed at
the end of the accounting period. In case of the
latter, the period is not specified. Deposits are
automatically renewable unless a notice of three
months is given to terminate the contract. No
withdrawals or further deposits are permitted in this
kind of contract, but customers are allowed to open
more than one account. The profits are calculated
and distributed at the end of the accounting period.
Gifts in Wadiah and Qard
 When the bank provides such gifts at a
certain rate on deposits without fail, the
customer would now have a clear
expectation of returns. He/she would
expect returns without bearing any risk.
This comes dangerously close to
devouring riba
Guaranteed Return in
Mudaraba
 A general guarantee on all investment
deposits on the other hand seems to be
too susceptible to riba to gain
acceptance.