In a conventional context, a current account (or checking account) is a deposit account that has no stated maturity and whose funds are available on demand by the account holder. However, in the context of Islamic banking, current accounts are deemed as loans (quroodh: pl. of qardh) not deposits. When a client “deposits” funds to his current amount, the depositee (the bank) comes to own the funds and a liability to repay the amount is established against it.

It is possible for the account holder to withdraw these funds at any time he wishes. Since the bank is viewed, from a shari’a point of view, as owner of the deposited funds in the current account, it will have the right to use or invest these funds and make profit thereon. Yet, the bank remains under obligation to pay back a similar (mithli) amount on demand. Conceptually, this the meaning of qardh in Islamic finance, which differs from wadia’a (deposit) in fiqh parlance. Wadia’a, a form of trust (amanah), refers to a valuable item (wealth) that is left by a depositor (mudie’e) with a depositee for safe custody. A depositee (wadie’e) cannot use or invest this wealth for his own benefit.

In the case of current accounts, the bank is under obligation to return a similar amount on demand. In other words, it guarantees repaying the deposited funds even if it incurred a loss on using or investing this money. In contrast, wadia’a is viewed as a trust in the possession of the depositee (wadie’e), who will not be liable for the loss of which in case of force majeure (i.e., in cases where no negligence or transgression is committed by the depositee).