Can money be treated as a commodity?

In-Depth Analysis

In a conventional bank's customer deposit transaction, the customer actually sells his or her money to the bank at a deferred price: the deferred price being the principal amount plus interest. The ownership of the money and its possession is transferred from the customer to the conventional bank upon completion of deposit by the customer with the bank. Having shifted the title and possession of money to the conventional bank, the customer stands relieved from the equity risk in the risk of ownership of money. However, the customer will now be exposed to the credit risk of US$200,000 resulting from entering into a deferred payment contract (term deposit contract) with the bank. Having acquired the title and possession of money from the customer, the conventional bank becomes the owner of the money, giving it the right to sell the money to another person or entity — i.e., the bank's borrowing customer — at a price higher than the price the bank bought it from the depositor. The document presented to the customer for placement of the deposit shall not be a deferred payment contract as learned in article 15 but a fund management arrangement called the Mudarabah agreement. By virtue of the Mudarabah agreement, instead of selling his money, the customer shall merely hand over its possession to be managed by the Islamic bank while retaining ownership to the money. A golden Shariah principle is not to allow combining the guarantee with the return. This is the reason that Islamic banks are allowed to guarantee the current account funds since they do not provide any profit on them. On the other hand, since holders of investment savings accounts and investment deposit accounts (term deposits) are part of Mudarabah and hence are paid a profit on their funds, the Islamic bank is not allowed to guarantee these funds.