Purpose This study aims to analyse the Shariah issues in the implementation of tawarruq contract in the Islamic profit rate swap (IPRS) instrument in Malaysia. Design/methodology/approach This is a qualitative study in applying data analysis and semi-structured interview approaches. Data was collected from various documents including journals, articles and past studies conducted by scholars. To achieve the purpose of this study, the data is analysed based on thematic analysis. Findings The study found several Shariah issues regarding the implementation of tawarruq contract in the IPRS instruments, which have remained a dispute amongst the Islamic financial scholars such as its profit-making purpose, encouragement of debt, impediment of shared risk concept, disputed underlying assets, a deception towards allowing riba and dual agency. Research limitations/implications This study recommends several improvements such as the establishment of a neutral agency that does not represent any banking institution to manage the tawarruq contract commodity purchase from Bursa Suq al-Sila’ (BSAS). In addition, a neutral agency can provide aid in terms of transaction facility or at least consultation service for clients to enable them to conduct the commodity transactions independently. Practical implications Moreover, guidelines should be established on the separation of the deadline to sign the agreement of appointment of a bank as the commodity purchase agent and the agreement of appointment of the bank as the commodity sale agent on behalf of clients. All transactions related to tawarruq contract commodity must be done through BSAS. The regulators and industry experts may create a guideline for the IPRS based on the issues and recommendations that have been discussed in this study. Originality/value On the basis of the analysis of the criticisms and issues in the implementation of tawarruq contract in the IPRS instrument, the current study found that an intermediating institution is allowed to gain profits from transactions conducted so long as they are based on Shariah principles of contract in Islam. As there is no parameter specifically for IPRS, thus the suggested parameter can be used by policymakers such as the Central Bank of Malaysia to ensure the industry complies with Shariah principles.
Kontrak derivatif merupakan kaedah pengurusan risiko atau lindung nilai yang penting dalam dunia kewangan. Namun, kontrak ini masih tidak memenuhi kehendak Syariah sepenuhnya. Spekulasi dalam pasaran derivatif merupakan isu terbesar yang menjadi perbincangan sarjana Islam masa kini. Hal ini adalah kerana spekulasi merupakan salah satu elemen yang penting dalam merancakkan pasaran derivatif. Sedangkan aktiviti spekulasi yang berlebihan telah mengundang berlakunya kejatuhan pasaran yang kritikal sekaligus menjadikan kontrak derivatif tidak selaras dengan kehendak syarak. Kajian ini adalah bertujuan untuk menganalisis elemen-elemen utama yang perlu wujud dalam kontrak derivatif bagi memastikan ianya patuh syariah. Kajian ini merupakan kajian kualitatif dengan mengambil pendekatan analisis kandungan sebagai metod kajian. Kajian ini juga menganalisis beberapa artikel jurnal dan polisi dokumen berkaitan isu derivatif. Kajian ini tertumpu pada kontrak derivatif. Hasil dari kajian mendapati terdapat elemen-elemen penting bagi memastikan kontrak derivatif dilaksanakan bertepatan dengan kehendak syariah antaranya ialah tujuan memasuki kontrak derivatif adalah untuk lindung nilai, aset dan kontrak pendasar patuh syariah, tiada pemisahan risiko dengan aset pendasar dan memberi impak ekonomi yang sebenar. Selain itu juga, konsep maslahah dan mafsadah boleh dijadikan kerangka dalam memastikan kontrak derivatif bertepatan dengan objektif syariah.
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