holding the current account is itself the pledgee, the funds must be transferred to an investment account so that the guarantee is removed by converting the transaction from a loan (qarḍ) to a qirad (muḍāraba). The profits of that account rightfully belong to its owner, thereby preventing the pledgee (the creditor) from benefiting from the growth of the pledged asset.

Fifth: The bank may place a hold on the accounts provided this has been agreed upon between the bank and the client.

Sixth: The basic condition for the permissibility of any transaction is trustworthiness and honesty, expressed by transparent disclosure of information in a way that removes ambiguity or deception, corresponds to reality and accords with the Sharīʿah perspective. This obligation is especially binding on banks with regard to the accounts they hold, because their work rests on the presumption of trust and in order to protect the parties concerned from deceit.

Allah knows best.

Resolution of the Islamic Fiqh Council concerning the imposition of financial penalties for late payment:

The Islamic Fiqh Council of the Muslim World League, in its eleventh session convened in Mecca from Sunday 13 Rajab 1409 AH to Sunday 25 Rajab 1409 AH, examined the question submitted by His Eminence Shaykh ʿAbd al-Ḥamīd al-Sāʾiḥ, Sharīʿah adviser to the Islamic Bank in Jordan, which reads as follows:

“If the debtor delays repayment of the debt beyond the agreed term, does the bank have the right to impose on the debtor a punitive monetary fine, calculated at a certain percentage, because of the delay in payment on the due date agreed between them?”

After study and deliberation, the Council unanimously resolved as follows: If the creditor stipulates, or imposes upon, the debtor to pay him a specified punitive monetary fine, or a fine calculated at a certain percentage, should he delay payment beyond the due date agreed between them, such a stipulation or imposition is invalid; it is not binding and it is unlawful, whether