I would like to know the permissibility of Mudarabah term deposits arranged by Islamic Banks. Here in Bangladesh, most Islamic banks have Mudarabah term deposits (MTDR) wherein the ‘provisional profit rate’ is declared beforehand (please refer to the following link for an example). However, the actual profits may be more or less. Are these term deposits Shariah-compliant?
http://www.siblbd.com/home/profit_rates
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
Bank serves as mudharib [working partner]. Depositors are rabbul maal [investors]. Bank is predicting profits and possible returns and not the exact return. This is based on their calculation. There is nothing wrong with this. However, the depositors should be informed that this is an estimation and they are not entitled to that. They are entitled to the exact percentage of profit.
And Allah Ta’āla Knows Best
Ridwaan Ibn Khalid Esmail [Kasak]
Student Darul Iftaa
Katete, Zambia
Checked and Approved by,
Mufti Ebrahim Desai with the following comments:
Our answer is specific to the concept of a provisional profit rate of a general mudharaba account. Our answer should not be taken as approval of the mudharaba accounts in Bangladesh as we have not studied the contracts and applications of the contracts.