Asri Wulandari (09410248)

Islamic Savings A. Definition of Islamic Savings Account Saving account is one kind of Islamic banking products in funding. There are some differences between saving account in the conventional bank and in the Islamic bank. According to the Law number 10 of 1998 on the Amendment of the law number 7 of 1992 on Banking, a savings account is a deposit that can only be withdrawn under a certain pre-agreed condition, but cannot be withdrawn through cashiers checks, bank drafts, or other instrumental proxies.1 Regarding such definition of saving account in the conventional bank, it is different with saving account in the Islamic bank. In Islamic bank, it provides an Islamic savings account that is managed under the principles of sharia. In this case, the National Sharia Council has issued a fatwa stating that the savings account considered as sharia compliant are those based upon the wadiah and mudharabah principles.2 B. Differences between Wadiah and Mudharabah Savings Wadiah Savings

In this kind of savings, that is wadiah savings, the safekeeping activities mostly based on the fund owners wish and tend to be more protecting the position of the fund owner itself. Regarding this kind of savings account, actually this savings account adapting the principle wadiah yad adhdhamanah which means the clients act as the party entrusting a right to the bank to make good use of or benefit from the money or goods, whereas the Islamic bank acts as the party entrusted with the right to manage the money or goods in its safekeeping .3 However, the bank still have to be liable over the entrusted fund which is under wishes of the clients. Still, the bank also has right over the profit gained from the use of the contract or the object. Regarding the profit, actually whether the entrusting client and the entrusted bank cannot promise each other to make any profit which is out of safekeeping object but still able to provide bonus in which based on voluntary policy discretion or do not involved any prior agreement with the clients. Here are some some methods to give awadiah bonus that can be taken, namely as follows: a. Provision of wadiah bonus based on the lowest price Provision of wadiah bonus based on the lowest balance, by which the wadiah bonus tariff is multiplied by the lowest daily balance in a given month b. Provision of wadiah bonus based on the average daily balance

A. Karim Adiwarman. 2005. Islamic Banking (Fiqh and Financial Analyses). PT Raja Grafindo Persada : Jakarta p. 293 2 Ibid. 3 Ibid.

Provision of a wadiah bonus based on an average daily balance, by which the wadiah bonus tariff is multiplied by the average daily balance in a given month c. Provision of a wadiah bonus based on the daily balance Provision of a wadiah based on a daily balance, by which the wadiah bonus tariff is multiplied by the daily balance (on the day of calculation) and by effective days.4 Mudharabah Savings

This kind of savings account is under mudharabah contract. There are two forms of mudharabah, namely the mudharabah mutlaqah and mudharabah muqayyadah, whose major difference between the two lies in the presence of, or the lack thereof, pre-conditions stipulated by the fund owner to the bank, which manages the fund.5 In this transaction, the clients act as shahih al maal or fund owner while the bank act as a mudharib or fund manager. In the contract, if there is a loss that is not caused by the negligence of bank, then the bank will not be liable over that loss, still if mismanagement taking place during the contract, then the bank must be liable over the loss. In managing the mudharabah fund, the bank covers the accounts operational cost through the profit ratio it is entitled with. In addition, the bank is not allowed to reduce the savings account holders profit rate without the latters consent. According to the prevailing regulations, the income tax imposed on the profit from a mudharabah savings is directly deducted to the mudharabah savings at the time of profit sharing.6 Profit sharing for a mudharabah savings account is based on the average daily balance calculated at the end of each month and at beginning of bookkeeping in the month that follows.7

4 5

Ibid. p. 294 Ibid. p. 295 6 Ibid. p. 296 7 Ibid.