What is the ruling on what is called variable-return deposit certificates?
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The questioner : His EminenceThe Shaykh : What is the ruling on what is called variable-return deposit certificates, and their form is: that you deposit certificates in one of these banks for a specific amount for a period of two years, during which the bank pays an unspecified return at the issuance of these certificates, and that is every three months, knowing that the depositor can retrieve the value of the certificates at any time?
The Shaykh : But where did they get the profit from?
The questioner : From the bank.
The Shaykh : But where did the bank get this profit from? Did it trade with the dirhams and make a profit?
The questioner : It traded with these certificates themselves; these are deposit certificates.
The Shaykh : By Allah, I did not anticipate this issue, but in any case, if he says: give me dirhams and this is a debt on me, and then after a period he gives you dirhams, whether specified or unspecified, we do not trust the banks. Perhaps they specify the interest, or what they call interest, and we do not see it as interest; we see it as a loss, but they specify, for example, saying to you: give me one hundred thousand and I will give you one hundred and ten after a year, or he says: give me one hundred thousand and I will give you an unspecified increase.
We do not know if this is true, that he sold and traded with these dirhams until he profited, and that it is a year of profit and a year of no profit, or that he deposited them in a fund and started dealing in usury with them and started playing with people, sometimes saying: I will give you five percent, and sometimes saying: ten percent, and sometimes saying: I am not giving you anything because the money did not profit. We do not know, so this depends on our trust in the bank and its handling.
The questioner : May Allah reward you with good.
The Shaykh : But where did they get the profit from?
The questioner : From the bank.
The Shaykh : But where did the bank get this profit from? Did it trade with the dirhams and make a profit?
The questioner : It traded with these certificates themselves; these are deposit certificates.
The Shaykh : By Allah, I did not anticipate this issue, but in any case, if he says: give me dirhams and this is a debt on me, and then after a period he gives you dirhams, whether specified or unspecified, we do not trust the banks. Perhaps they specify the interest, or what they call interest, and we do not see it as interest; we see it as a loss, but they specify, for example, saying to you: give me one hundred thousand and I will give you one hundred and ten after a year, or he says: give me one hundred thousand and I will give you an unspecified increase.
We do not know if this is true, that he sold and traded with these dirhams until he profited, and that it is a year of profit and a year of no profit, or that he deposited them in a fund and started dealing in usury with them and started playing with people, sometimes saying: I will give you five percent, and sometimes saying: ten percent, and sometimes saying: I am not giving you anything because the money did not profit. We do not know, so this depends on our trust in the bank and its handling.
The questioner : May Allah reward you with good.