Qard Hasan, Wadīah/Amānah and bank deposits: Applications and misapplications of some concepts in Islamic banking

Based on the categorical prohibition of ribā in the Qurān, presumably further reinforced by adīth, qar (loan) is considered ribawī, i.e., only gratuitous monetary loans are considered permissible. Deposits (particularly, demand deposits) in Islamic banks are often structured as qar asan, or wadīah/amānah (trust). Based on the Qurān, adīth and earliest Islamic discourse, this article examines whether qar is ribawī and whether the application of the concept of qar asan or wadīah/amānah is coherent in the context of Islamic finance. © 2011 Koninklijke Brill NV, Leiden.