Purpose This paper aims to make an attempt to analyze the adoption of wakalah in the tawarruq deposit that may trigger new issue. Design/methodology/approach This paper provides a review on the underlying contracts for deposit-taking activities. Findings There are two mains findings from this paper – first, the current deposit taking activities are characterized by principal guaranteed, it deems contrary to the nature of mudarabah. Second, we suggest the presence of wakalah in tawarruq term deposits and we argue that the application of the concept of bay al-wakillinafsihi would not affect the validity of wakalah. Originality/value This paper is considered to have its own originality in the sense that the introduction of tawarruq-based deposit product by Islamic banks could be the best alternative to the current deposit products.
Purpose The purpose of this paper is to critically study the application of beneficial ownership in sukuk ijarah by analysing the fiqh interpretation on the concept of beneficial ownership. Design/methodology/approach This is a theoretical paper using content analysis approach that delves into the works of Islamic scholars on the concept of ownership and evaluates the concept of beneficial ownership in sukuk ijarah from the Islamic perspective. Findings The paper concludes that the beneficial ownership should be considered as true ownership because Shari’ah has allowed the transfer of ownership by a sole basis of contract (offer and acceptance). Although the sukuk holders are not registered as the legal owners in the Land Office, the documentations and agreements have clearly specified the owners and their liabilities. Research limitations/implications Empirical investigations into how sukuk holders are responsible for the underlying assets in sukuk ijarah. Practical implications It is therefore important to develop parameters for beneficial ownership to govern the use of the concept in Islamic finance. Originality/value The paper shows the fiqh interpretation on the beneficial ownership in sukuk ijarah while considering all the constraints and challenges in the implementation of sukuk.
The Ministry of Agriculture and Food Industries Malaysia (MAFI) has launched the National Agrofood Policy (NAP) which is a government transformation initiative that aims to increase productivity and quality of the national food supply with the role of ensuring adequate and safe food supply. However, there are some drawbacks in realising the aim to achieve at least a 74.1% level of self-sustenance in the national food supply by only contributing 2.3% to the Gross National Product (GNP). The importance of this study is to show the increase in paddy and rice agricultural products will drive the country's economy to continue to grow rapidly where the effect can be seen when the transition from heavy industry to agro -based industry that saves national expenditure and at the same time gives good returns to low-income groups. This study intended to analyse the need for a national rice supply plan from an Islamic perspective. The research methodology adopted is the content analysis research design and data were collected and analysed using a combination of descriptive and qualitative approaches. Textual analysis included an analysis of various documents, such as official reports, yearly reports, administrative circulars, departmental reports, financial plans, agency reports, and transcripts. Findings show that agriculture-related fiqh in Islam is intended to increase the quantity and quality of the national rice supply, increase national income, as well as emphasise on Halalan Tayyiba and clean food products holistically and sufficiently. This study suggests that rice production should be increased and prioritised in Malaysia compared to other commodities. The Ministry of Agriculture and Food Industries should pay serious attention and play its role in expanding the agriculture sector in accordance with Shari'a.
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.
Two common ways to invest gold in Malaysia, either physical gold investment or by way of opening gold saving account. Investing in physical gold can be done by means of buying and selling instrument. Meanwhile gold investment account can be done by means of buying and selling as well as mudarabah. Due to gold which is capital in mudarabah in E Qirad is in the form of dinar, while dinar is no longer considered as a currency, but dinar is a commodity. Therefore, the question arises whether dinar is valid either based on currency or commodity ( c arud). This study aims to determine the above mentioned position, and to study the profit of investing in E Qirad gold.
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