Affiliation: Assistant Professor (Ph.D), Department of Economics, University of Batna 1, Algeria
Abstract: Demand deposits (current accounts) are crucial to banks activity, particularly with regards to granting loans. For commercial banks, the primary source of funds is bank deposits. This article attempts to analyze and discuss the legal nature of the demand deposit contract, with a particular focus on the widely agreed upon characterization of this contract as a loan contract in all today’s legal systems (Common law, Civil law, Islamic law and hybrid legal systems). After discussing the arguments and building blocks of the loan theory and examining the essence of both contracts through the lenses of economics, law and Islamic jurisprudence, this paper concludes that the demand deposit contract cannot be considered a loan contract, with supporting arguments from economic, legal and Islamic jurisprudential perspectives.
@article {Benlala: 2022,
doi = {10.36475/8.4.2},
url = {https://doi.org/10.36475%2F8.4.2},
year = 2022,
month = {dec},
publisher = {European University Institute of Law},
volume = {8},
number = {4}
pages = {16-33},
title = {{ A } {\ SCRUTINY } { OF } { THE }
{ DEMAND } { DEPOSIT } {(CURRENT ACCOUNT) }
{ THROUGH } {THE } { LENSES } { OF } { LAW } { AND }
{ ISLAMIC } { JURISPRUDENCE },
journal = { Law and World }
}
×
TY - JOUR
AU – Benlala M.A.
DO - 10.36475/8.4.2
UR - http://dx.doi.org/10.36475/8.4.2
T2 - Law and World
PY - 2022
DA - 2022/12/28
PB - European University Institute of Law
SP - 16-33
IS - 4
VL - 8
SN - 2587-5043
SN - 2346-7916
ER -
×
Benlala, M.A. A SCRUTINY OF THE DEMAND DEPOSIT (CURRENT ACCOUNT) THROUGH THE LENSES OF LAW AND ISLAMIC JURISPRUDENCE (2022). Law and World , 8(4). 16-33. Internet Archive. https://doi.org/10.36475/8.4.2
×
Benlala MA, (2022) ‘A SCRUTINY OF THE DEMAND DEPOSIT (CURRENT ACCOUNT) THROUGH THE LENSES OF LAW AND ISLAMIC JURISPRUDENCE.’ Law and World , 8(4), pp. 16-33. Internet Archive. https://doi.org/10.36475/8.4.2
×
Benlala, Mejd Aures. “A SCRUTINY OF THE DEMAND DEPOSIT (CURRENT ACCOUNT) THROUGH THE LENSES OF LAW AND ISLAMIC JURISPRUDENCE.” Law and World , vol. 8, no. 4, Dec. 2022, pp. 16-33. Internet Archive, Crossref, https://doi.org/10.36475/8.4.2
×
[1] M.A. Benlala “A SCRUTINY OF THE DEMAND DEPOSIT (CURRENT ACCOUNT) THROUGH THE LENSES OF LAW AND ISLAMIC JURISPRUDENCE,” Law and World , vol. 8, no. 4, pp. 16-33, Dec. 2022, doi: 10.36475/8.4.2.
×
Benlala MA, A SCRUTINY OF THE DEMAND DEPOSIT (CURRENT ACCOUNT) THROUGH THE LENSES OF LAW AND ISLAMIC JURISPRUDENCE. Law and World [Internet]. 2022 Dec 28;8(4): 16-33. Available from: http://dx.doi.org/10.36475/8.4.2
×
Mejd Aures Benlala, “A SCRUTINY OF THE DEMAND DEPOSIT (CURRENT ACCOUNT) THROUGH THE LENSES OF LAW AND ISLAMIC JURISPRUDENCE.” Law and World 8, no. 4 (December 28, 2022): 16-33. https://doi.org/10.36475/8.4.2
Bagus, P., ‘Austrian Economics and New Currency Theory on 100% banking: A response to Huber’, Revista Europea de Economía Política, vol. XI, no. 1, 2014, pp. 105-136. http://dx.doi.org/10.52195/pm.v11i1.176
Bagus, P. and Howden, D., ‘The Legitimacy of Loan Maturity Mismatching: A Risky, but not Fraudulent, Undertaking’, Journal of Business Ethics, vol. 90, no. 3, 2009, pp. 399-406. http://dx.doi.org/10.1007/s10551-009-0050-z
Bagus, P. and Howden, D., ‘Deposits, Loans and Banking: Clarifying the Debate’, The American Journal of Economics and Sociology, vol. 72, no. 3, 2013, pp. 627-644. http://dx.doi.org/10.1111/ajes.12023
Bank of Marin v. England (1966) 385 U.S. 99
Chorley, L., The law of Contract in Relation to the Law of Banking, Gilbart Lectures on Banking, London, 1964.
Linzer, P., ‘Implied, Inferred, and Imposed: Default Rules and Adhesion Contracts – the Need for Radical Surgery’, Pace Law Review, vol. 28:195, 2008. https://digitalcommons.pace.edu/plr/vol28/iss2/3
Meawad, F., Daour Al-qadhi fi taadil Al-aqd, Dar Al-jamia Al-jadida. Egypt, 2004.
Medina, E. and Bagus, P., ‘A Critique of the Pure Natural Law Approach to Loan Maturity Mismatching and Fractional Reserve Banking’, Dialogi Polityczne journal, 2018. http://dx.doi.org/10.12775/DP.2018.001
Steven v. Fidelity Casualty Co. (1962) 58 Cal.2d 862, 27 Cal.Rptr. 172, 377 P.2d 284
The Council of the International Islamic Fiqh, Bank Deposits (Bank Accounts), 1995, April 6, para. 1, iifa-aifi [website], https://iifa-aifi.org/en/32511.html [Last seen: 21 March 2022].
Von Mises, L., The Theory of Money and Credit, Liberty Classics, Indianapolis, Ind., 1980.
J. Huerta de Soto, Money, Bank Credit, and Economic Cycles. Ludwig Von Mises Institute, Auburn, AL., 2006.
P. Bagus & D. Howden, ‘The Legitimacy of Loan Maturity Mismatching: A Risky, but not Fraudulent, Undertaking’. Journal of Business Ethics, vol. 90 no. 3, 2009, pp. 399- 406, http://dx.doi.org/10.1007/s10551-009-0050-z
P. Bagus & D. Howden, ‘Deposits, Loans and Banking:Clarifying the Debate’, The American Journal of Economics and Sociology, vol. 72, no. 3, 2013, pp. 627-644, http://dx.doi.org/10.1111/ajes.12023
A, Al-Jaziri, Kitab al-Fiqh 'ala al-Madhahib al-Arba'a, vol, 3, 2nd edn, Dar Al-Kotob Al-ilmiya, Beirut, Lebanon, 2003, pp. 219-220, https://waqfeya.net/book.php?bid=5423 [Last seen: 21 October 2022].
The Council of the International Islamic Fiqh, Bank Deposits (Bank Accounts), 1995, April 6, para. 1, iifa-aifi [website], https://iifa-aifi.org/en/32511.html [Last seen: 21 March 2022].
Abu Sarhan, p. 177.
Cranston, p. 132.
L. Chorley, The law of Contract in Relation to the Law of Banking, Gilbart Lectures on Banking, London, 1964, pp. 6-7.
P. Linzer, ‘Implied, Inferred, and Imposed: Default Rules and Adhesion Contracts – the Need for Radical Surgery’, Pace Law Review, vol. 28:195, 2008, p. 12, https://digitalcommons.pace.edu/plr/vol28/iss2/3 [Last seen: 13 September 2022].
L. Von Mises, The Theory of Money and Credit, Liberty Classics, Indianapolis, Ind, 1980, pp. 300-301.
Huerta de Soto, p. 16.
Ibid, p. 18.
E. Medina & P. Bagus, ‘A Critique of the Pure Natural Law Approach to Loan Maturity Mismatching and Fractional Reserve Banking’. Dialogi Polityczne, 2018, p. 13, http://dx.doi.org/10.12775/DP.2018.001
Al-Maoussoua Al-Fiqheya, vol. 43, 2nd edn, The Ministry of Awqaf and Islamic Affairs in Kuwait, 1983, p. 56, https://waqfeya.net/book.php?bid=878 [Last seen: 3 July 2022].
Ibid, p. 55.
F. Meawad, Daour Al-qadhi fi taadil Al-aqd, Dar Al-jamia Al-jadida, Egypt, 2004, p. 275.
Al-Maoussoua Al-Fiqheya, p. 46.
Ibid., p. 23.
A. Ibn Hajar, Fath Al-Bari bi shareh sahih Al-Bukhari, vol. 6, Al-maktaba Al-salafiya, Cairo, Egypt, 1960, pp. 230,234- 235, https://waqfeya.net/book.php?bid=10573 [Last seen: 30 June 2022].