ISB540 - WADIAH
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Transcript of ISB540 - WADIAH
MAHYUDDIN KHALID [email protected]
FIQH MUAMALAHISLAMIC BUSINESS TRANSACTION
CHAPTER TWELVE
AL-WADIAH
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
2
DEFINITION EVIDENCE PILLARS SIGNIFICANCE OF AL-WADIAH MODERN APPLICATION
CONTENT
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
3
Literally: Al-wadiah it means to leave, quit, abandon etc
Technically: A thing or commodity committed to the trust and
care of a person A contract whereby a person leaves his property for
safe protection to another person
Al-wadiah is the commission given by the depositor to the depositary for holding his property in safe custody; al-amanah
DEFINITION
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
4
EVIDENCE
Al-Quran: .
Hadith: “Discharge the trust to the person who entrust it to
you, and do not betray the one who betrays you”
Ijma’: The scholars from every single era of the Islamic eras
had came to a consensus on the permissibility of the Wadiah c ontract since it is desired by the people in general to the extent that it is actually an essential and vital contract for the society
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
5
1. Al – Muwaddi’ Depositor, Owner of the property
2. Al – Wadi’ Depositee, Custodian of the property
3. Al-Wadiah Property for safe keeping
4. Sighah Offer (Ijab) Acceptance (Qabul)
PILLARS OF AL-WADIAH
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
6
FLOWS OF AL-WADIAH
Al-Muwaddi’(Depositor, Owner of
the property)
Al – Wadi’(Depositee, Custodian of
the property)
Al-Wadiah (Property for
safe keeping)
Ijab (Offer)
Qabul (Acceptance)
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
7
TYPES
1. Wadiah Yadd al-Amanah
Act of Trust
Bank acts as a trustee to the fund.
If the money under custody is accidentally lost or destroyed, the custodian is not obliged to replace or compensate it.
2. Wadiah Yadd al-Dhamanah
Act of Guarantee
Bank’s responsibility is in form of guarantee
If the deposits are pooled together and are utilized, it is compulsory for the bank to return the fund as when requested by the customer
TYPES OF AL-WADIAH
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
8
Al-Wadiah: Act of Trust (amanah) or Act of Gurantee (dhamanah)? The jurists from different mazhabs had agreed that al–
Wadiah is an act of good deed which is encouraged (mandub), and there is reward (in the hereafter) for its preservation.
It is essentially an act which is based on pure trust(amanah) and not a guarantee (dhamanah).
The depositee is not liable to be the guarantor of the contract except for cases of carelessness or negligence.
Hence, it is not legal to require the trustee to be a guarantor (accountable).
AL-WADIAH CONTRACT : TRUST OR GURANTEE?
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
9
Besides the cases of ignorance, contract of Wadiah could be transformed from trust (amanah) into guarantee (dhamanah) in the following cases if the depositee:1. Ignores the protection and safe keeping of the
deposited property2. Deposits the property with somebody else, or not
somebody who normally takes care of the depositee’s property.
3. Benefits from the usage of the deposited property4. Travels with the deposited property.5. Refuses to return the deposited property to the
depositor or withholds it even though he/she is capable of returning it.
6. Mixes the deposited property with other properties, which could not be recognized and distinguished from each other.
7. Commits certain conducts which are against the predetermined condition of the depositor.
AL-WADIAH: ACT OF TRUST BECOME ACT OF GUARANTEE
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
10
1. Safeguard and protect any valuable from being stolen, destroyed or misplaced.
2. The protection of valuables for almost everybody who thinks their home and office are not safe enough. It is also costly and not cost effective (except for bigger corporations) to manage these properties on their own since not everybody could afford to manage their valuables on their own and still need professional individuals or groups to handle it.
3. Furthermore, in the case of Cash Deposits, it could also be used for investment purposes and can contribute to the economic growth of the nation from two aspects:a. The surplus units (depositors) could channel their cash
for the deficit units (companies and entrepreneurs). They can obtain return in the form of dividends or profit.
b. The deficit units (companies and corporations) could obtain funds for the financing of their projects from the pool of funds deposited by the surplus units.
SIGNIFICANCE OF AL-WADIAH
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
11
1. Al–Malikiah , Abu Yusof, Al-Laiths and Sufyan
The profit is for the depositee who traded the cash
REASON:
1. The agent (depositee) is the guarantor and custodian of the money until it is returned back to the real owner.
2. The depositor does not essentially enter the contract of Wadiah with the intention of gaining any profit but with the purpose of safe guarding their deposited property. Hence, they should be given their original property without any amount of profit.
2. Abu Hanifah The depositee should donate the profit without benefiting from the proceeds
REASON:
1. The revenues were earned through an illicit gain.2. If it is forbidden to sell the Wadiah property, the acquired profit
would be considered as an illicit gain which could only be purified through donation and charity.
3. The profit will be shared and split between the depositor and depositee on the basis of Mudharabah contract.
PROFIT GAINED FROM THE USAGE OF MONEY UNDER AL–WADIAH
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
12
Responsibility of an Islamic Bank is considered as Yad Dhamanah when: Bank imposes certain fee on the safe keeping of the
items and provides a special place for the safe custody of these items.
The bank will be held responsible for the replacement of these items in cases of loss, damage or destroy even if these disaster occur unintentionally or due to negligence.
Bank uses the cash money for business purposes. In this case, the bank is obligated to fully return the al-Wadiah money that has been used back to the owner, regardless of whether the bank had made any profit or even loss from the business venture using the al–Wadiah money.
This means that any profit would be owned by the bank and they have the right to give all or part of the proceeds back to the depositor based on their discretion as a gift or token which are not promised earlier
MODERN APPLICATION
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
13
Al-Wadiah Current Account Islamic Bank mobilizes customers’ deposits in Current
Account under the principles of Al-Wadi’ah Yad Dhamanah (guaranteed custody).
It is based on the combination of contract of custody (al-Wadi’ah) and guarantee (Yad Dhamanah).
Bank receives deposits from its customers who want to make a safe custody of their funds and utilizing the services provided under the scheme of a current account.
The bank then will ask permission to utilize their funds. However, the customers may withdraw their saving any time they desire.
All the profit generated by the bank from the use of funds belongs to the bank.
The bank provides cheque books and other services provided by conventional bank to the current account.
MODERN APPLICATION
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
14
Al-Wadiah Saving Account Islamic Bank mobilizes customers’ deposits in Savings
Account under the principles of Al-Wadi’ah Yad Dhamanah (guaranteed custody).
It is based on the combination of contract of custody (al-Wadi’ah) and guarantee (dhamanah)
Bank accepts deposits from its customers who want to make a safe custody of their fund
Profit generated by the bank from the use of such funds belong to the bank.
Bank may at his discretion reward the customer by returning a portion of profits generated from the use of their funds from time to time.
Bank provides its customers with saving passbook and other usual services provided for saving accounts by the conventional banks. ah).
MODERN APPLICATION
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
15
CONVENTIONAL ISLAMIC
Loan contract CONTRACT Wadiah (safe-keeping) contract
Lender – Borrower RELATIONSHIP Depositor – Depositee
Deposits are paid interest
INCOME Deposits are not entitled to any income
Conventional banks must give the depositers their interest payment
OBLIGATION Islamic banks may give the depositer a share of the profits generated at their discretion
Deposits are liability products of a bank
PRODUCTS Deposits are either a trust or guarantee products of a bank
DIFFERENCES BETWEEN DEPOSITS UNDER ISLAMIC AND CONVENTIONAL BANKING
DEFINITION
EVIDENCE
TYPES
SIGNIFICANCE
APPLICATION
COMPARISON
16
END OF CHAPTER