Current Account-i is available under the concepts of Qard and Tawarruq.
Under the concept of Qard, the Bank takes an interest free loan from the Customer, transferring the funds’ ownership from the Customer to the Bank. The Bank is therefore allowed to use the funds for banking activities. The loan is payable upon demand by the Customer at any time, and the Bank guarantees the return of the principal amount on request. The above contract guarantees the Customer’s principal and is protected by Perbadanan Insurans Deposit Malaysia (PIDM) up to RM250,000.00 for each depositor.
Based on the Tawarruq arrangement, underpinned by the Murabahah contract (Cost Plus Profit Sale), it secures a Customer’s principal and agrees up-front on the rate of return via the sale contract of Murabahah (using Commodities). The Bank then will become the Customer’s “Purchasing” and “Selling” Agent in a dual-agency arrangement. This allows the Customer to instruct the Bank to act on their behalf, to enter into a Tawarruq arrangement. This structure guarantees Customers’ principal, fixes the Customer’s profit (if held for the month), and is protected by Perbadanan Insurans Deposit Malaysia (PIDM) up to RM250,000.00 for each depositor.
