erent ways. In some banks, the depositors allow the banks to use their money but they obtain a guarantee of getting the full amount back from the bank. Banks adopt several methods of inducing their clients to deposit with them, but no profit is promised. In others, savings accounts are treated as investment accounts but with less stringent conditions as to withdrawals and minimum balance . Capital is not guaranteed but the banks take care to invest money from such accounts in relatively risk-free short-term projects. As such lower profit rates are expected and that too only on a portion of the average minimum balance on the ground that a high level of reserves needs to be kept at all times to meet withdrawal demands.
Investment account. Investment deposits are accepted for a fixed or unlimited period of time and the investors agree in advance to share the profit (or loss) in a given proportion with the bank. Capital is not guaranteed. [8]
Loans and Debts
There are different ways through which funds could be raised to meet individuals and organizations needs and funding requirements. Raising loans is one of the various ways these requirements can be fulfilled. In the terminology of Islamic framework, Qard and Dayn relate to the giving or taking of loans. However, the word Dayn has a broader connotation then the word Qard. Dayn incurs in any way which leaves a debt as a liability to another party to be paid later without any profit over the principal amounts. Whereas, Qard could be defined as an interest-free loan for needy borrowers extended on a goodwill basis; in particular Qard al Hasan provides funds for humanitarian and welfare purposes without any profit accruing to the lender. In fact, Qard consists on giving ownership of anything having value for the benefit of another by way of virtue. The ownership of the loaned objects is transferred to the borrower who can use, buy, sell, or donate them as the borrower wishes. Qard is only applied when one gets obliged to return the equivalent of the thing taken and repayment is for the same amount as the amount lent. Goods of the same kind will be paid back on demand or at the settled time. Qard should not bring any return or addition to the lender because that would be equivalent to taking Riba. However, a borrower can pay more than the amount borrowed, but it must not be stip ulated in the contract. Further, the date of payment of the loan may or may not be included in the Qard contract as the lender can demand repayment at any time. And the loan should not be conditional upon any other contract, such as Bai 'and vice-versa. is another structure of borrowing goods in a virtuous act. However, in the case of Ariyya, the exact borrowed commodity has to be returned to its owner, not any replace...
