1. “THE LEGALITY OF PREMIUM
SAVING CERTIFICATE (SIJIL
SIMPANAN PREMIUM) IN
ISLAMIC LAW”
NOR SHAFINA HASHIM (1229384)
SITI KHADIJAH NAZHIRAH BINTI AHMAD
KAMAL(1225948)

2. What is PSC?
a numbered saving certificates which
redeemable, either on demand or otherwise
issued by the Bank for a deposit account on
which dividend may or may not be payable and
which may or may not participate in periodical
draws held by the Bank of the award of bonus
payment by way of cash or otherwise to the
holders thereof.

3. 

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PSC has been established in 1974 by Bank
Simpanan Nasional (BSN).
The eligibility for whom to apply for this
certificate is he or she must be a Malaysian
citizen or permanent resident, foreigners with
permanent address and he must be above 12
years old.
The minimum purchase for BSN customer is
at least RM10 for 1 unit.
The PSC can be purchased via
counter, mail, and at all ATM and may
redeemed fully or partially after 45 days from
the purchase date.

4.  The objective of the establishment of
Premium Saving Certificate by Bank
Simpanan Nasional is to encourage the
citizen of Malaysia to keep and save
their money in the BSN.
 The said scheme acts as one of the
ways to attract public to save money via
scheme.
 As a result of the purchasing PSC, the
bank will eventually give reward on the
certificate that is successful in the
random selection .
 This product of BSN also meant to
educate the communities on the

5. ISSUES RELATED TO PSC
GAMBLING
AL-WADI’AH


6. 1. GAMBLING
This issue has been questioned by an individual
person, Hajah Kathum binti Haji Kasim in 1981, when
she was questioning whether there is any element of
gambling when PSC is considered as a saving product
as it is in the concept of al-wadi’ah.
The definition of gambling is derived from the Arabic
word, qimar or maysir.
Maysir means a game of haphazard in all matter
particularly a game of chance by means of divinatory
arrows.
However, according to scholar of Al-Jurjani, he
defines qimar as a game with the condition that the
winner (ghalib) of the two contestants gains something
from the loser (maghlub).

7. 


Gambling is prohibited in Islam and it can be
seen in one hadith narrated by Imam Malik
which the hadith stated that
“Whosoever plays the dice, he surely has
betrayed Allah and His Messenger”.
the prohibition of gambling also can be seen in
the al-Quran in the chapter of al-Baqarah:
219, chapter of al-Maidah: 90 and the effect of
gambling has been stated in chapter alMaidah: 91.
The element of gambling is being relate to the
PSC because the scheme is offering the
certificates holders to participate in the lucky
draw which is done every month by BSN.

8. Opinions of Modern Scholars
About This Issue

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Dato’ Syed Alwi bin Abdullah al-Hadad :
that PSC is ja’iz because it does not constitute
as gambling.
also defined gambling as putting to stake or
betting something in the hope of receiving
something back in return.
Gambling is differed from PSC because if
there is any winning or losing the prize does
not cause the loss of state and bet.

9. 
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
Muzakarah Fatwa Committee under the
National Council or Islamic Religion Affairs
which was held on 19th February 1992
stated PSC is permissible in Islam because
there is no evidence that shows PSC is a part
of gambling as there is no element of betting.
The certificate is considered solely saving and
the depositors shall be able to obtain back the
same amount of money that they have
deposited.
There is no risk of losing their savings at the
time of draw irrespectively on whether they
won the prize or not because the bank does
not use their savings to give the prizes.

10. AL-WADI’AH
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al-wadi’ah literally means something that is left by
someone to be guarded or something that is
placed under the custody of someone other than
the owner for the purpose of save guarding it.
Jumhur defined that al-wadi’ah is a concept by
appointing others to save guard in a specific way
of asset that a person own
Hanafi defined al-wadi’ah as giving power to
someone to save keep a person’s assets either
clearly stated or unstated such as al-wadi’ah
words is given to another person.
Al-wadi’ah is permissible in Islam as being stated
in Al-Qur’an, (4:58).

11. 
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The issue that arise is whether PSC is one of the
types of al-wadi’ah but the concept itself is far astray
from the requirements of al-wadi’ah because PSC
failed to fulfil the entire requirement that have been
laid down by shari’ah.
PSC originally is a form of al-wadi’ah Contract (saving
contract).
In this case, if it is al-wadi’ah, the BSN is not allowed
to use the deposited money saved by the depositors
in PSC.
However, BSN, the ones who is responsible to handle
this scheme, used PSC deposits for the purpose of
investments, loans and others besides combining the
deposits with other depositsors’ money.
In this context, PSC deposits shall be changed from
al-wadi’ah into al-wadi’ah yad damanah (Saving with
Guarantee)

12. Opinion of contemporary jurists
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Yusuf Al-Qadrawi, Wahbah al-Zuhayli and others
agreed to use the concept of al-wadi’ah yad
damanah because when it turn to al-wadi’ah yad
damanah, it will be considered as a loan or debt
from the depositors to the bank.
When the concept of al-wadi’ah yad damanah
acted as a loan, BSN should not offer prizes to
their certificates holders because it may lead to
the element of riba.
This is clearly clarified from the Hadith of Prophet
Muhammad S.A.W narrated by Harith ibn Abi
Hisham. Prophet said that,
“Every loan that brings a benefit is riba.”
Thus, PSC is not compatible with the wadi’ah
contract and wadi’ah yad damanah.

13. Shari’ah compliance:
Mudarabah
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Mudarabah is a shared contract on the basis
of principle of profit and loss sharing where an
individual gives his capital for another
individual for the use of investment.
Later, both parties shall share any profit or loss
according to the conditions that has been
prescribed in the agreement earlier.
Mudarabah also can be defined as a contract
of partnership between the provider of capital
in one hand and the user of capital on the
other hand

14. 
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contract of mudarabah is permissible in the
Islamic laws as it has been practised among
the pre-Islamic Arabs.
The Prophet s.a.w. himself entered into a
mudarabah contract with Khadijah. After the
advent of Islam, mudarabah was approved
and continued to be practised.
Caliph Umar and other companions also used
to invest the properties of the orphans in
mudarabah businesses so that zakat would
not reduce the wealth of the orphans.

15. 
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This concept also has been accepted in the
Malaysia when the booklet that contains rules and
regulations with explanation has been established
by Bank Negara. It is known as “The Principle
and Practices in Shariah Finance, (Shariah
Standard on Mudarabah)”.
The main objective for this guideline is to provide
the standard features of Shari’ah in Islamic
Financial Transaction This particular document
facilitates a better understanding of Shari’ah
Islamic Financial Transaction pertaining to the
requirement of Shari’ah contracts.
Basically this document becomes the yardstick for
standard of Islamic Financial Transaction to be
applied for a particular Shari’ah contract in the

16. 

PSC is one of the products from BSN that use
mudarabah contract where the status of PSC
has been clarified in the 98th Disclosure of
Fatwa Committee of the National Fatwa
Council for Islamic Religious Affairs in
Malaysia convened on 13th February till 15th
Ferbruary 2012 has reached to the decision of
the legality of Saving Premium Certificate of
BSN that stated is able to fulfil all requirements
for Shari’ah Compliance and it is permissible
under the Shari’ah.
Thus, PSC is allowed in Shari’ah because this
is a contract of mudarabah where Bank
becomes the promoter meanwhile the

17. CONCLUSION

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PSC is an effort of the BSN to encourage the
public to keep and save their money since its
launch in June 1978.
It has been categorised under the
conventional product of BSN.
PSC is permissible in Malaysia as it has been
proven by the contemporary scholars including
the Muzakarah Fatwa Committee under the
National Council or Islamic Religion Affairs

18. 
Moreover, it has been proven that there is no
issue of gambling in PSC while for the issue of
al-wadi’ah, it has been replaced by mudarabah
contract to make it shariah compliance.