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Article
Publication date: 19 August 2022

Muhammad Izzul Syahmi, Mohammad Taqiuddin Mohamad and Mohd Anuar Ramli

There are two purposes to this study: first, to identify the status of ḥiyal (legal devices) in the offering of deposit products based on the tawarruq contract in the Malaysian…

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Abstract

Purpose

There are two purposes to this study: first, to identify the status of ḥiyal (legal devices) in the offering of deposit products based on the tawarruq contract in the Malaysian Islamic banking industry and second, to identify the reasons for the widespread offering of tawarruq-based deposit products by Malaysian Islamic banks (IBs).

Design/methodology/approach

The study uses the qualitative method that involved interviews with Malaysian Sharī‘ah experts and Islamic banking operations experts.

Findings

The findings show that Malaysian IBs resolved to use the tawarruq munaẓẓam contract in deposit products due to several constraints in the existing banking system and in view of customer preferences.

Research limitations/implications

This study solely focuses on tawarruq-based deposit products due to its extensive application in the Malaysian Islamic banking industry.

Practical implications

The implication of the study is that more stringent procedures are required in the offering of tawarruq-based deposit products as they are extensively utilised and have sparked controversy among Sharī‘ah scholars. Moreover, to retain Malaysia's Islamic banking reputation and trustworthiness, new and less controversial contracts must be developed.

Originality/value

This paper discusses the extensive usage of ḥiyal-based contracts such as tawarruq in Islamic banking institutions' deposit products, with justifications from Malaysian Islamic banking experts. The widespread use of the tawarruq munaẓẓam contract in deposit-based product offerings is based on a reasonable view considering the constraints that Malaysian Islamic banking is currently facing, with strict operation procedures by Bank Negara Malaysia to ensure real operations and to avoid fictitious elements. This paper reveals the use of tawarruq munaẓẓam in deposit products which allows the Islamic banking industry to operate effectively under Malaysia's dominant conventional banking system.

Details

ISRA International Journal of Islamic Finance, vol. 14 no. 3
Type: Research Article
ISSN: 0128-1976

Keywords

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Article
Publication date: 29 March 2024

Mohd Shahid Mohd Noh, Suffian Haqiem Nor Azelan and Muhammad Izzul Syahmi Zulkepli

This study aims to systematically review the literature on modern Islamic finance transactions pertaining to Gharar dimensions. Gharar is defined as uncertainty that potentially…

346

Abstract

Purpose

This study aims to systematically review the literature on modern Islamic finance transactions pertaining to Gharar dimensions. Gharar is defined as uncertainty that potentially leads to ambiguities and conflicts in contracts.

Design/methodology/approach

The articles reviewed in this study consisted of 13 articles related to Gharar published between 2013 and 2022. All selected articles were empirically and descriptively searched using specific keywords and strings. The main sources for this study were Scopus and Web of Science (WoS), whereas Google Scholar was a supportive database.

Findings

The review found that the dimensions that discussed previous research were trying their best to elaborating Gharar in modern financial transactions. They also demonstrate that rigorous study and deployment of the definition remain in the context defined by jurisprudence scholars. The focus of recent studies pertaining to Gharar is derivatives products that indicate high possibility of uncertainty in its operation.

Research limitations/implications

This method relies heavily on the accessed database, namely, Scopus and WoS, also referred to the articles as recommended by the databases. Furthermore, the criteria of inclusion and exclusion of papers outlined by the authors deemed as an intrinsic limitation in writing systematic literature review.

Originality/value

To the best of the authors’ knowledge, this paper is original in its nature whereby the scholars had different comprehension on how Gharar exists in transaction but they still centred in its original meaning of uncertainty. As a result, this paper also realized how Gharar were interpreted differently relied on the contract’s nature and behaviour. In addition, this paper is expected to contribute to understand how Gharar been interpreted in modern finance transactions and finally reached to the point that further research is needed in establishing Gharar parameter for each contract in Islamic commercial law.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Available. Open Access. Open Access
Article
Publication date: 8 December 2022

Beebee Salma Sairally

396

Abstract

Details

ISRA International Journal of Islamic Finance, vol. 14 no. 3
Type: Research Article
ISSN: 0128-1976

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