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Banks seizing dormant accounts against Shariah

JEDDAH: Shariah experts on financial matters declare that local banks are committing a crime by seizing the deposits in accounts that had not been accessed in the past five years.
The experts demand that agencies such as the Saudi Arabian Monetary Agency (SAMA) take action against such violations of both Shariah principles and rules of international banking.
They made this demand while reacting to a recent media report that banks in the Kingdom seized the deposits in dormant accounts that were not operated for the past five years.
The report quoted Secretary-General of the Media and Awareness Committee of Saudi Banks Talat Hafiz as saying that the banks have been converting the deposits in dormant accounts to a special account for their own investments. Hafiz refused to disclose the amount involved in such operations.
Economic Consultant and Member of the Islamic Economy and Financing Commission Yusuf Al-Zamil said a bank seizing its client’s deposits in the event of the client's whereabouts not being known or absence is a clear violation of Shariah law.
“International banking regulations do not permit confiscation of clients deposits under any situation. If a bank takes possession of money in the account of a person and invests its in some projects, it should be under certain conditions. The money should be returned with a share of the profit to the account holder when he or she is traced. The other condition is that if the deposit is an Islamic banking account, the investment should be in Shariah-compliant projects,” Al-Zamil said.
While experts believe that banks might have appropriated hundreds of millions of riyals in dormant accounts, bank authorities refuse to disclose how much money they have earned from those accounts.
Al-Zamil appealed to SAMA to demand from local banks to convince account holders to have secret codes for their accounts or to have banks classify files of account holders as confidential. This way, only the person who would bring that code to the bank could access his account. The account holder should also inform his heir of the secret code or write it down.
“It is the Prophet's Sunnah that a man should tell his heirs where his wealth is and how it could be accessed,” he said.
Associate Professor of Comparative Fiqh at the Higher Institute of Justice Yusuf Al-Qassim also declared the move of the local banks to appropriate money of its customers in dormant accounts as haram (unlawful).
“No local bank is permitted to seize the wealth of a depositor or investor in kind or cash and so such practices are criminal. The Prophet (peace be upon him) said, ‘A Muslim’s wealth is not lawful to others without his permission’.”
Al-Qassim said it is unlawful for a bank to seize the deposit of an account holder, even if the bank stipulated at the time of opening the account that it has the right to appropriate the account holder’s money if he did not operate the account for a long period. Such a stipulation is not legally valid because the client agrees to it only under compulsion.

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