Islamic banks in Malaysia mostly use Al Wadiah concept to accept deposits from customers. Under this Islamic scheme of savings and current account, you will enjoy interest free safekeeping services of your money, as well as a share of any profit that the bank makes by utilising your deposit. The bank uses an Islamic banking principle that is known as "Al Wadiah Yad Dhamanah" which means guaranteed custody. This scheme ensures that Islamic financial institutions acquire deposits under Islamic banking principles. The core of this arrangement is that the bank has the authority to use your deposits and gives a guarantee to return it to you when you need it. You will periodically obtain a share of the profits earned by the bank when it utilizes your money to invest in its business ventures. The portion of profit to be shared with you is at the absolute discretion of the bank. This reward is your alternative to the interest income that you would otherwise receive from a conventional bank.
What is Al-Wadiah?
