182th SAC Meeting (28 Nov 2017) : Practice of Collaterising Deposits and Investment Accounts to Secure a Financing Obligation

The Shariah Advisory Council (SAC) ruled that the practice of collaterising deposits and investment accounts to secure a financing obligation is permissible. The account can be utilised by Islamic financial institutions (IFIs) (as pledgee) with the consent of customers (as pledgor), subject to the following conditions:

Customers are allowed to choose any type of account, including deposit or investment account as collateral against the payment of financing obligation; and
The financial obligation or liability owed by the customer to the IFI does not arise from a loan (qard) contract.

Please refer attachment for more information.

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