Tawarruq as a Product for Financing within the Islamic Banking System: A Case Study of Malaysian Islamic Banking System

Ahmad, Ellida Fauziah; Shihama, Mariyam; Tarmizi, NurSulaim Ashikin Mohamad; Jibril, Saidu Mudi; Djama, Samia Ibrahim; Muneeza, Aishath

doi:10.18646/2056.41.17-004

Cited by 30 publications

(46 citation statements)

References 3 publications

(7 reference statements)

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“…There are contradictory views on the utilization of organized Tawarruq. While some jurists consider this contract as "Halal", others view it as "Haram" and should not be used by Islamic banking (Ahmad et al, 2017;Khnifer, 2010).…”

Section: Resultsmentioning

confidence: 99%

The Interest in Islamic Finance Contracts in Saudi Arabia as Viewed by Google Trends

Aldarabseh¹

2019

IJEF

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Several Islamic contracts have been used by Islamic banks to cover the financial needs of their customers. The contracts include Murabahah, Ijarah, Tawarruq, Mudarabah, Musharakah, Salam, and Istisna'. In the current study, the interest in Islamic financial contracts in the past 5 years (2014)(2015)(2016)(2017)(2018)(2019) in Saudi Arabia as viewed by Google trends was examined. The interest in Murabahah showed increases with the years, whereas decreases in the interest of Tawarruq, Salam Mudarabah were observed in the last years. However, the interest in Ijarah and Istisna' was stable during the examined period. With respect to Musharakah, the interest decreased with years until 2017 then it showed slight increases in 2018 and 2019. Differences in the interest of financial contracts were also observed across different regions of Saudi Arabia. The interest in Ijarah, Tawarruq and Istisna" was higher in Riyadh, whereas the interest in Murabahah and Musharakah was higher in Ha"il than other Saudi regions The present findings can be used by Islamic banks to shape their financing services according to observed interest trends and across different regions of Saudi Arabia.

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Section: Resultsmentioning

confidence: 99%

The Interest in Islamic Finance Contracts in Saudi Arabia as Viewed by Google Trends

Aldarabseh¹

2019

IJEF

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“…BSAS is introduced to solve the issues whereof Shariah principles are violated such as ownership of the underlying asset, possession, delivery, agency problem and so forth. Thus, along with the constructive possession, BSAS allows the real possession of the commodity as well which may incur an addition cost (Ahmad et al, 2017).…”

Section: Receiving the Travelers' Checkmentioning

confidence: 99%

Application of Constructive Possession (Qabd Hukmi) In Islamic Banking Products: Shariah Analysis

Rahman¹

2020

TUJISE

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Possession is one of the fundamental elements to acquire wealth in a valid manner. Financial contracts will not be concluded and irrevocable without possession of respective subject matter. It has been observed that in contemporary Islamic banking products and transactions mostly, not the real, but a legal or constructive possession is practiced, and in this context the customary practices play a significant role in determining the proper mode of possession. Thus, this effort intends to investigate the essence of possession and its appropriate mode for contemporary Islamic financial transactions. This is a library-based research and it has adopted qualitative document and content analysis. The classical references to prominent Schools of Islamic law have been utilized as the primary tools to perform this analysis and investigation. The study finds out that the essence of possession is to relinquish it to the merchandise and its rightful beneficiary, so that it can be enjoyed without any interruption. It posits that the mode of possession would be varied subject to the nature of the commodity itself.

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“…However, the Act may cause unintended consequences for investment account holders, such as lower profit payout and "withdrawal risk" (Archer et al, 2010) where investment accountholder withdraw their funds and switch to other financial products. The Act makes Islamic financial contracts like Mudharabah (partnership) unsuitable for deposit accounts because of their non-guaranteed principal nature (Ahmad et al, 2017).…”

Section: Islamic Financial Services Act 2013 and Investment Accountmentioning

confidence: 99%

Impacts of the Islamic Financial Services Act 2013 on Investment Account products offered by Islamic Banks in Malaysia

Budiman¹,

Abdulaziz²,

Jaffar³

et al. 2019

IJMAR

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The Islamic Financial Services Act (IFSA) 2013 is a Malaysian banking law which was enacted to regulate and supervise the banking practices of Islamic finance institutions. IFSA 2013 has the effect of repealing the Islamic Banking Act 1983 (IBA), the Takaful Act 1984, the Payment System Act 2003 and the Exchange Control Act 1953. Prior to the introduction of IFSA 2013 there was no clear distinction between deposit and investment accounts. The IFSA 2013 re-defines Islamic deposit, and classifies investment accounts as non-principal guaranteed while deposit account as principal guaranteed. The objective of this paper is thus to explore implications of IFSA 2013 on investment accounts from the perspective of the banker. Future research could explore the perspective of account holders looking at their views on investment accounts and IFSA 2013.

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Tawarruq as a Product for Financing within the Islamic Banking System: A Case Study of Malaysian Islamic Banking System

Abstract: Many discussions and studies have taken place regarding the permissibility of Tawarruq and 'Inah transactions. While Tawarruq is widely used in Malaysia and around the globe 'Inah has been declined by many Islamic banks operating in many jurisdictions.

Cited by 30 publications

References 3 publications

The Interest in Islamic Finance Contracts in Saudi Arabia as Viewed by Google Trends

The Interest in Islamic Finance Contracts in Saudi Arabia as Viewed by Google Trends

Application of Constructive Possession (Qabd Hukmi) In Islamic Banking Products: Shariah Analysis

Impacts of the Islamic Financial Services Act 2013 on Investment Account products offered by Islamic Banks in Malaysia

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