Saving Policy and Profit Allocation System in Islamic Banking: Problems and Ways out

Islamic banking thought started mainly as a preventive measure against the usurious banking system. For this reason, some of the ideals of Islamic economics had to be discounted initially for ‘interim’ considerations. One of those transitional issues is the interest-bearing banking savings system. In keeping with this, the DPBM (Daily Product Basis Method) method was approved temporarily. This method is valid though; however, it does not reflect the ideal application of Mudaraba due to various reasons. Islamic banking is currently crossing half a century. Many contemporary jurists now think that a more sustainable model for Islamic banking needs to be thought and researched in addition to those interim considerations. Reviewing the conventional savings system in this text proposes some ideal and unique frameworks and models for Islamic banking. The ‘Trading House Model’ has been proposed as the main ideological model which will be managed based on Mudaraba and shirkat. Besides, the loan-based saving house model and waqf house model have also been proposed through the descent method. The Author argues that although there is complexity in implementing these models, it would not be appropriate to continue practicing the ongoing Murabaha, DPBM method-based model.