d. LKS may require a guarantee to customers where
necessary e.
Customers al qardh can provide extra voluntarily to the LKS for not agreed in the contract
f. If the customer is unable to return part or all of its
obligations at the time agreed and Islamic financial institution IFI has ensured incompetence,
IFI can do: • Extending the repayment period
• Remove write off part or all of its obligations.
C. CONCEPT OF WADIAH
Wadiah corresponds to safekeeping, custody, deposit and trust. In Islamic finance, wadiah refers to the deposit of funds or assets by a person
with an Islamic bank. In this arrangement, the depositor deposits his funds or assets with the bank for safekeeping and in most of the agreements the
bank charges a fee for the safe custody of the depositor’s funds.
1. There are two types of wadiah:
• Wadiah yad amanah refers to property is deposited on the basis
of trust guarantee safe custody.
• Wadiah yad Dhamanah refers to savings with guarantee or
safe-keeping.
The term wadiah relates to the old concept of amanah where one person hands over his or her
assets to other person for the purpose of safekeeping. The concept of Wadiah has been
implemented in different Islamic countries such as Malaysia and Bangladesh Hosen
Nahrwai, 2012. Generally, Islamic banks charge an accounts
maintenance fee for wadiah accounts, which can be attributed to the administrative costs incurred by the bank in managing the assets or
funds in safe custody.
2. Some Features of Wadiah Bank Accounts.
a. This is a non-profit and loss bearing product.
b. Bank gives the guarantee to return the full amount on demand
maturity at its own risk depositor will not share the risk.
c. Bank can invest this deposited fund with the permission of the
depositor. Bank may share the profit with the depositors as per
management’s decision.
d. Accounts maintenance fees apply.
3. Related Verse from The Qur’an.
“Indeed, Allah commands you to render trust to whom they are due and when you judge between people, to judge with justice” Al Quran,
Al Nisa, 4:58
