Application of Ta’widh and Gharamah in Islamic Banking in Malaysia
Total Views: 2687
DOI:
https://doi.org/10.33102/jmifr.v16i1.205Keywords:
Gharamah, Islamic banking, Penalty, Ta’widhAbstract
The objective of this paper is to explore the practical application of ta’widh and gharamah in Islamic banking in Malaysia with reference to the guidelines that are applicable to date; and find out the issues detected in the implementation of them. In the course of doing this, Shariah reasons for imposing ta’widh and gharamah in Islamic banking are discussed. Also, whether ta’widh and gharamah would be required for Islamic banking with reference to possible alternatives to them is also discussed. This qualitative study primarily focuses on library research and adopts case study approach for analyzing the application of ta’widh and gharamah. The jurisdiction of the study is Malaysia because the central bank of the country has made policies on the matter. The paper draws on observations made by Shariah scholars about the policies on the subject matter. This study gives an insight into the history and issues related to ta’widh and gharamah which are often kept tacit. It is recommended that future studies should look into the effectiveness of these two approaches to serve as a deterrent factor and contribute to the declining rate of non-performing financing in Islamic banks.
Downloads
References
Abd Rahman, Z. (2006, June 21). Ruling on debt trading in shariah. Business Times, NST. Retrieved from http://zaharuddin.net/senarai-lengkap-artikel/38/58--ruling-on-debt-trading-in-shariah.html.
Alam, N. & Rizvi, S. A. (2017). Islamic banking: Growth, stability and inclusion. London: Palgrave.
Al-Kasani. (n.d.) Bada’i al-Sana’i fi Tartib al Shara’i Vol. 5, Al-Qahirah.
Al-Mani’, ‘Abdallah Ibn Sulayman. (2003). The Problem of late payment in Islamic banks. Doha, Qatar: The International Islamic Fiqh Academy of the Organisation of the Islamic Conference.
Al-Quran. (Vol. 2). (n.d.).
Al-Zuhayli, D. W. (2001). Financial Transactions in Islamic Jurisprudence (Vol. 2). Damascus: Dar Al-Fikr.
Abu Ghuddah, A. S. (2008). Debt issues: Zakah upon debts and trading in debts: An introduction to juristic and practical issues. Paper presented at the 7th Conference of the Shariah Boards of AAOIFI, 27 – 28 May 2008, Manama, Kingdom of Bahrain.
Ahmad, N. H. & Ahmad, S. N. (2004). Key factors influencing credit risk of Islamic bank: A Malaysian case. The Journal of Muamalat and Islamic Finance Research, 1(1), 65-80.
Ahmad, W. & Misman, F. N. (2012). Off-balanced sheet risk: Evidence from Malaysia Islamic and conventional banks. The Journal of Muamalat and Islamic Finance Research, 9(1), 125-142.
Ashraf, M. A. & Lahsasna, A. (2017). Proposal for a new Shariah risk rating Approach for Islamic Banks’. ISRA International Journal of Islamic Finance, 9(1), 87-94.
At-Tijari Islamic Bank. (n.d.). List of fees and charges. Retrieved on 30th November 2018 from https://www.cbdislami.ae/general/fees-charges.
Aziz, M. R. (n.d.). Islamic banking and finance in Malaysia: Issues and challenges. Nilai: USIM Publisher.
Bank Islam. (2013). Credit risk in Islamic banking. Retrieved on 30 November 2018 from http://www.bankislam.com.my/en/Documents/cinfo/CreditRiskinIslamicBanking-IFSB-290413.pdf.
Bank Negara Malaysia. (2013). Law harmonisation committee report 2013. Retrieved on 20th November 2018 from http://www.bnm.gov.my/documents/2013/BNM_LHC_Report_2013.pdf.
Bank Negara Malaysia. (2010). Shariah resolutions in Islamic finance- 2nd Edition. Retrieved from http://www.bnm.gov.my/microsite/fs/sac/shariah_resolutions_2nd_edition_EN.pdf
Bank Negara Malaysia. (2011). Guidelines on late payment charges for Islamic banking institutions. Retrieved on 20th November 2018 from https://islamicbankers.me/focus/late-payment-charges-tawidh-gharamah/.
Bank Negara Malaysia. (2012). Guidelines on late payment charges for Islamic banking institutions. Retrieved on 20th November 2018 from https://islamicbankers.files.wordpress.com/2013/12/guidelines-on-late-payment-charges-for-islamic-banking-institutions.pdf.
BNI Shariah. (2016). BNI Shariah. Retrieved on 20 November 2018 from http://www.bniShariah.co.id/en/penghapusan-denda-tunggakan.
Comparehero. (2015). Decoding The Rule of 78. Retrieved on 20th November 2018 from https://www.comparehero.my/blog/decoding-the-rule-of-78.
Dusuki, D. W., Khir, M. F. & Muhammad, D. M. (2010). Implimentasi ibra' dalam produk berasaskan harga tangguh dalam sistem perbankan Islam: Analisis dari perspektif operasi perbankan dan maqasid shariah. Retrieved on 20th October from I-FIKR/ISRA: http://ifikr.isra.my/publication/-/publication/getPublicationDetail/177.
Hajjiri, T. M. & Cohen, A. (2016). Global insolvency and bankruptcy practice for sustainable economic development: General principles and approaches in the UAE. New York: Palgrave Macmillan.
Huraidi, A.M. A.S. (1986). Al-Ribh Al-Natij 'An Syart Jaza'ie fi Al-'Aqd Halaal. Retrieved on 20th October 2018 from http://dar-alifta.org/Foreign/Articles.aspx?ID=3.
Islamic Financial Services Board. (2005). Guiding Principles Of Risk Management For Institutions (Other Than Insurance Institutions) Offering Only Islamic Financial Services . Retrieved on 20th November 2018 from http://ifsb.org/standard/ifsb1.pdf.
Kamali, M. Hashim. (2000). Islamic commercial law. Cambridge: Islamic Text Society.
Kasaani, A. (n.d.). Bada'ie As-Sana'ie fi Tartib Al-Shara'ie' (Vol. 5).
Khan, I. & Rahman, N. N. (2010). Mawqif Al-Shaikh Muhammad Taqi Al-Uthmani fi Mas'alah Al-Ta'widh 'an Darar Al-Matl fi Bai' Al-Taqsit. Jurnal Fiqh (7).
Khan, M. A. (2013). What is wrong with Islamic economics? Analysing the present state and future agenda. UK: Edward Elgar Publishing.
Kunhibava, S. (2016). Claiming ta'wid in Islamic banking. Malayan Law Journal Articles, 4(1).
Laldin, M. A., Khir, M. F. & Parid, N. M. (2012). Fatwas in Islamic banking: A comparative study between Malaysia and Gulf Cooperation Council (GCC) countries. Kuala Lumpur: ISRA.
Meethaq Islamic Bank. (2016). Taarif Book, Meethaq Islamic Banking, Bank Muscat. Retrieved on 28th November from http://www.meethaq.om/PDF/Meethaq_Tariff_Book_Eng.pdf.
MK Associates Sdn Bhd v. Bank Islam Malaysia Berhad [2015] MLJU 1954 30 October, 2016, pp. 1-12.
Mohamad, A. H. (2011). Malaysia as an Islamic FinanceHub: Malaysian Law as the Law of Reference & Malaysian Courts as the Forum for Settlement of Disputes, 12th Emeritus Prof. Ahmad Ibrahim Memorial Lecture, Wednesday 7th December 2011, Law Harmonisation Committee, Bank Negara Malaysia. Retrieved from http://www.bnm.gov.my/index.php?ch=en_lhc&pg=lhc_newsroom&ac=233.
Mohamad, T. A. (2012). Tun Abdul Hamid Mohamad. Retrieved on 2nd December 2018 from http://www.tunabdulhamid.my/index.php/speech-papers-lectures/item/483-late-payment-charge-on-judgment-debts.
Mohammed, N. (2015). AAOIFI standard number three – Default in payment by a debtor. Retrieved on 20th November 2018 from https://www.islamicfinance.com/2015/06/aaoifi-standard-number-three-default-payment-debtor/.
Muhammad, A.d. b. (n.d.). Al-Mua'amalaat Al-Maliah Asaalah wa Al-Mu'asarah (Vol. 5).
Sahih Muslim. (n.d.). Vol. 5. Houston: Dar-us-Salam Publications Inc.
Noor, A. M. & Haron, M. N. (2016). A framework for determination of actual costs in Islamic financing products. A Journal of Islamic Finance, 5(2), 37-52.
Rahman, Z. A. (2009, February 12). Halalkah penalti di Bank Islam. Retrieved on 12th November 2018 from http://zaharuddin.net/perbankan-&-insuran/801-halalkah-penalti-di-bank-islam-.html.
Sahih al-Bukhari, (n.d.) Vol. 3. Houston: Dar-us-Salam Publications Inc.
Samir, Alamad. (2017). Financial innovation and engineering in Islamic finance. Cham: Springer International Publishing AG.
Seho, M., Alaabed, A. & Masih, M. (2016). Risk-sharing financing of Islamic banks: Better shielded against interest rate risk?. The Journal of Muamalat and Islamic Finance Research, 13(2), 53-70.
OIC Fiqh Academy. (1992). Seventh session, Resolution 65/3/7 – Item no. 4., (7-12 Dhul Qi'da 1412 H (9-14 May 1992), Jeddah, Saudi Arabia.
The Star. (2016, May 10). Malaysia's Islamic Banks have better growth stability and quality than others. Retrieved from The Star Online: http://www.thestar.com.my/business/business-news/2016/05/10/greater-growth-stability/.
Usmani, M. I. (2012). Examining the prudence of Islamic banks: A risk management perspective. Journal of Islamic Banking and Finance, 29(3), 93-99.
Uthmani, M. T. (2002). An introduction to Islamic finance. New Delhi: Idara Isha'at-E-Diniyat.
Yaacob, H. (2011). Analysis of legal disputes in Islamic finance and the way forward: With special reference to a study conducted at Muamalat Court, Kuala Lumpur, Malaysia. Kuala Lumpur: ISRA.
Published
How to Cite
Issue
Section
Copyright (c) 2019 Aishath Muneeza, Nur Adibah Zainudin, Ruqayyah Ali, Siti Nadzirah Ibrahim, Zakariya Mustapha
This work is licensed under a Creative Commons Attribution 4.0 International License.
