If collateral in an agreed neutral custodian’s possession perishes, al-Quduri assigns its secured financial liability to the pledgee’s side. It does not become an ordinary deposit in every respect merely because a third party stores it.
Example: the debt is 100,000 and the pledged asset’s legally secured value is 70,000. If it perishes under the ordinary pledge rule, 70,000 is offset and 30,000 remains due, absent a separate ground changing liability.
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Loss of collateral in neutral custody
Kitab al-Rahn: Salam, Sarf, Third-party Custody and Fungible Collateral
If collateral in an agreed neutral custodian’s possession perishes, al-Quduri assigns its secured financial liability to the pledgee’s side. It does not become an ordinary deposit in every respect merely because a third party stores it.
Example: the debt is 100,000 and the pledged asset’s legally secured value is 70,000. If it perishes under the ordinary pledge rule, 70,000 is offset and 30,000 remains due, absent a separate ground changing liability.