The Concept and Application of Hibah as a Financial Instrument From the Malaysian Legal Perspective: An Analysis

Abstract

The principle of hibah (gift) is a popular subject in the Islamic law of administration, relating to wealth management. Hibah is a solution to deliver wealth to non-heirs apart from the wasiyyah (bequest) or faraid (succession) systems. However, in the broader context of wealth management in Malaysia, hibah has also been used as a financial instrument in the Islamic financial institutions’ products and services. Based on that, the legality and enforcement of hibah with regards to the related applicable laws in the Malaysian legal system might be affected in two different situations. First, the conflict of jurisdiction may be arising from the fact that the matter of the classical hibah concept will be under the jurisdiction of the classical hibah concept will be under the jurisdiction of the States, whilst the commercial hibah which has been structured with the Islamic banking and takaful products and services established by the Islamic financial institutions, will be under the Federal government. The scarcity of literatures discussing hibah from the perspective of Islamic banking and finance contributes to the limited understanding and awareness among the society on this matter. In view of that, this study explores and analyse the concept and application of hibah as the financial instrument in the Islamic banking and takaful products and services. This study also analyzes some relevant Shari’ah and legal issues on the application of hibah in the Islamic banking and takaful products and services, which are currently practiced by the Malaysian Islamic financial institutions. This is done by assessing relevant statutes and decided cases. This article finally provides recommendations to improve and enhance the application of hibah as an Islamic banking and takaful products and services in Malaysia.

Investigating the level and determinants of hibah knowledge: a study among Muslims in Kedah, Malaysia

“…The differences between the instruments of hibah, faraid and wasiyyah have been summarized by Kamarudin and Nor Muhamad (2018), as shown in Table 1 below: Cases involving hibah-related matters are under the Syariah Court jurisdiction, as stipulated in the Islamic Religious Administration Enactment and Syariah Court Enactment and most of the cases are on the validity of hibah and its jurisprudence (Muhamad et al, 2019). Hasan and Mohamad Zaizi (2020) observed that the classical hibah was merely a way of distributing assets among family members, made in accordance with the Muslim law of…”

Vagueness in The Hibah Amanah

“…Hibah Amanah became popular in the financial industry after it was introduced by Amanah Saham Nasional Berhad (ASNB) in the year 2013 (Noordin et al, 2016). A trust hibah contract is also known as a commercial hibah (Hassan & Zaizi, 2020) since it is an instrument commercialized by the financial industry in Malaysia, especially in the planning and property management section (Azhar, 2014;Azhar et al, 2014). Even now, it is found that there are Islamic banking institutions that collaborate with trust companies to offer trust grants, namely Bank Islam Malaysia Berhad with Amanah Raya Berhad (Islamic Bank, Amanah Raya Grant Document) and Bank Muamalat Malaysia Berhad with As-Salihin Trustee Berhad (Muamalat Bank, Pre-Hibah or Grant Document Declaration).…”

Maximizing Charitable Endowments for Healthcare: Maqasid Shariah Perspectives from Wahbah Zuhaili and Shariah Economic Laws Compilation

“…From the perspective of Islamic law, there are several terms related to the gift of property, one of which is hibah. Hibah refers to an agreement whereby a person transfers ownership of his or her assets to another person during his or her lifetime without compensation (Hassan & Mohamad Zaizi, 2020). Thus, linguistically, hibah means gift or grant.…”