ANALISIS NORMATIF-FILOSOFIS FATWA DEWAN SYARI’AH NASIONAL MAJELIS ULAMA’ INDONESIA (DSN-MUI) TENTANG TRANSAKSI JUAL BELI PADA BANK SYARI’AH

DSN-MUI uses trade transactions in Islamic financial institutions in order to avoid interest rate system. Moral and legal issues had became the important thing in the formulation of trade transaction in syariah banking, since the concern about the system of interest that still exist in syariah banking’s trade transaction. This means that the trade transaction on syariah banking according to fatwa DSN-MUI still contains usury (riba). This paper intends to explore the important things about the rules and practices of trade transaction on the syariah banking according to DSN-MUI. This study concluded that DSN-MUI performs ijtihād taṭbīqī to facilitate the concept of trade operations on syariah banking. DSN-MUI’s fatwa about trade transaction appears to correspond to a normative concept of fiqh. It's just that there is ambiguity in the salam and istithnā' contract and less attention to the philosophy of trade. The trade transactions were reduced as provision of funds for purchasing of goods, with multi contract institutions. The use of supporting contracts that are not true will potentially lead to morality inconsistencies in trade transactions.

Download Full-text

FRIENDLY LOAN: A LEGAL STUDY IN MALAYSIA

International Journal of Law, Government and Communication ◽

10.35631/ijlgc.626004 ◽

2021 ◽

Vol 6 (26) ◽

pp. 39-47

Author(s):

Hua Siong Wong

Keyword(s):

Interest Rate ◽

Central Bank ◽

Interest Rates ◽

Financial Institutions ◽

Financial Services ◽

Legal Issues ◽

Legal Study ◽

Library Research ◽

Laws And Policies ◽

The Interest Rate

Financial institutions licensed which were established under the Financial Services Act 2013 and the Moneylenders Act 1951 in Malaysia will provide financial loans at the interest rate charged permitted by-laws and guidelines from the Central Bank of Malaysia to borrowers. However, not all borrowers can afford to pay high and onerous interest rates. Therefore, the law in Malaysia allows for friendly loans, i.e. the lender will provide financial loans assistance to the borrower from of interest or with minimal interest rate. This study will focus on the extent to which the legal issues of the practice of friendly loans in Malaysia and whether the provisions of current laws and policies can protect the interests of both lenders and recipients of friendly loans. This study is qualitative in nature and involves library research. The results of this study will look at aspects of legal issues in order to protect the interests of both lenders and recipients of friendly loans. In fact, Malaysia could also consider creating a special law on friendly loans and regulated by the authorities.

Download Full-text

Penerapan Hybrid Contract sebagai Inovasi pada Produk Pembiayaan Multijasa di Lembaga Keuangan Syariah

Transekonomika: Akuntansi, Bisnis dan Keuangan ◽

10.55047/transekonomika.v1i6.96 ◽

2021 ◽

Vol 1 (6) ◽

pp. 567-577

Author(s):

Neni Hardiati ◽

Yoyok Prasetyo ◽

Nana Herdiana Abdurrahman

Keyword(s):

Product Development ◽

Financial Institutions ◽

Service Provider ◽

Literature Study ◽

Important Thing ◽

Customer Needs ◽

Rapid Product Development ◽

Islamic Financial Institutions ◽

Operational Activities ◽

Banking Operations

Rapid product development is carried out by Islamic Financial Institutions (LKS) in providing alternative services to the needs of the community which are carried out based on sharia principles. The development of these services is provided both in the form of banks and non-banks as well as in the form of storage or other types of services as well as in the form of financing. However, due to more complex customer needs, LKS requires innovation in order to get convenience in its operational activities. So, in innovating with hybrid contracts, it becomes an important thing. This research uses a literature study with a normative juridical approach, which is carried out by collecting, studying and reviewing books, scientific magazines and documents related to this research such as theses and scientific articles. The results of the study state that in the application of hybrid contracts in multi-service financing products at Islamic Financial Institutions (LKS) generally use ijarah contracts according to the DSN-MUI fatwa. In this case, if the LKS uses the ijarah contract, it must comply with the provisions of the fatwa as the service provider or the benefits obtained from the LKS. Meanwhile, if in a hybrid contract one or more contracts are added, in this case it is added with a wakalah contract, then the customer has the power to carry out his own costs. However, if there are customers who still have to pay ujrah for the ijarah contract, it is called usury. Because this is not justified in sharia principles and is not in accordance with the ijarah fatwa concerning the multiservice, the bank does not fulfill its service obligations as the fatwa regarding multiservice as well as the kafalah contract. Thus, there is an alternative in this multi-service financing, namely by using hawalah bil ujrah and wakalah contracts which are more flexible and their implementation as an innovation, namely combining these contracts with the aim of making banking operations easier, reaching wider and able to meet the needs of more customers.

Download Full-text

A critical analysis of the use of fair value by Islamic Financial Institutions

Journal of Islamic Accounting and Business Research ◽

10.1108/jiabr-10-2013-0037 ◽

2016 ◽

Vol 7 (2) ◽

pp. 170-183 ◽

Cited By ~ 4

Author(s):

Leila Gharbi

Keyword(s):

Growth Rate ◽

Interest Rate ◽

Financial Institutions ◽

Financial Reporting ◽

Fair Value ◽

Islamic Finance ◽

Content Type ◽

Narrative Methods ◽

Financial Reporting Standards ◽

Islamic Financial Institutions

Purpose This paper aims to address a specific question over the compatibility of International Financial Reporting Standards with Islamic finance regarding the use of interest rate as discounting rate in impairment testing and valuation techniques. Design/methodology/approach Inductive methodology and qualitative-narrative methods are used to explore the available texts and literature. Findings There are two main findings: first, the use of reference rate obtained in non-Islamic financial system is inappropriate from the Islamic perspective. Interest-based valuation techniques have not been adopted by the Accounting and Auditing Organization for Islamic Financial Institutions in its adaptation of conventional accounting practices, and the majority of Islamic scholars argue against Interest rate benchmarking. Second, the authors suggest nominal gross domestic product (NGDP) growth rate as an alternative benchmark because Islamic finance, in its ideal sense, is based on and closely linked to the real sector. Moreover, recent studies show that there are no statistical differences between NGDP growth rate and nominal interest rate for most of the countries studied. Originality/value This paper highlights the accounting implications of the prohibition of interest for valuation techniques and raises the need of acceptable alternative pricing benchmark.

Download Full-text

The Shariah Advisory Council in the Malaysian Islamic financial institutions: features and legal issues

J for Global Business Advancement ◽

10.1504/jgba.2016.076718 ◽

2016 ◽

Vol 9 (3) ◽

pp. 284 ◽

Cited By ~ 2

Author(s):

Nuarrual Hilal Md. Dahlan ◽

Ahmad Zafarullah Abdul Jalil ◽

Zairani Zainol ◽

Selamah Maamor

Keyword(s):

Financial Institutions ◽

Legal Issues ◽

Advisory Council ◽

Islamic Financial Institutions

Download Full-text

THE ALTERNATIVE ISLAMIC PRICING BASED ON NATURE OF BUSINESS

International Journal of Islamic Economics ◽

10.32332/ijie.v2i01.2003 ◽

2020 ◽

Vol 2 (01) ◽

pp. 69

Author(s):

Rachmawaty Rachmawaty

Keyword(s):

Interest Rate ◽

Interest Rates ◽

Financial Institutions ◽

Debt Financing ◽

Equity Financing ◽

Reserve Requirement ◽

Market Choice ◽

Islamic Financial Institutions ◽

Competitive Pricing

The contradictive of using interest rate as Islamic Pricing Benchmark (IPB) has been discussed among scholars. A lot of alternatives has been offer by scholars but the implementation is based on market choice which are the competitive pricing of interest rate and the advantage of majority share of conventional financing. In this paper there will be 3 objectives; first to give information of literatures review for some alternatives that already offer by scholars, second is to give information about pro and cons of using interest rates as the benchmark of cost of fund for Islamic Financial Institutions and the final objective is what author’s opinion and what kind alternative that author will provide based on literature review and author’s logic sense. The alternative IPB will be explained in this paper is based on nature of business, which will be categorized as IPB for debt financing, equity financing and combine financing. To implement IPB there are some infrastructure that will need to adjust in order to create fair environment such as educate customer and change the behaviour of customer to choose financing product, to change the role of bank and to see the paradigm of cost of statuary reserve requirement in central bank.

Download Full-text

Problems in the Status of Object Ownership of Ijarah Muntahiyah Bittamlik Financing Contract in Sharia Banking Law

Journal of Private and Commercial Law ◽

10.15294/jpcl.v3i1.18766 ◽

2019 ◽

Vol 3 (1) ◽

pp. 20-25

Author(s):

Nurul Hikmah

Keyword(s):

Economic Crisis ◽

Financial Institutions ◽

Legal Issues ◽

The Public ◽

Ownership Status ◽

Crisis Of Faith ◽

The Status ◽

Islamic Financial Institutions ◽

Economic Needs ◽

The Right

The crisis of faith and economic crisis accompanied by an increase in economic needs encourages one to find the right way, as well as the efforts made by producers and industry in marketing products without seeing the halal and haram provisions of a product. These reasons cause a variety of mu'amalah through financing agreements began to emerge, such as lease agreements known to the public with the term leasing introduced by Islamic financial institutions under the name Ijarah Muntahiyah Bittamlik, so this study aims determine the ownership status of the object of the Ijarah Muntahiyah Bittamlik financing contract. The author believes that the ownership status of the contract object on the financing of Ijarah Muntahiyah Bittamlik raises legal issues because of the unification of the contract between the lease and the sale and purchase which depends on the repayment of all the value of the goods.

Download Full-text

THE CONCEPT AND APPLICATION OF HIBAH AS A FINANCIAL INSTRUMENT FROM THE MALAYSIAN LEGAL PERSPECTIVE: AN ANALYSIS

IIUM Law Journal ◽

10.31436/iiumlj.v28i1.498 ◽

2020 ◽

Vol 28 (1) ◽

pp. 227-252

Author(s):

Rusni Hassan ◽

Nor Azdilah Mohamad Zaizi

Keyword(s):

Financial Institutions ◽

Islamic Law ◽

Legal Issues ◽

Islamic Banking ◽

Financial Instrument ◽

Banking And Finance ◽

Wealth Management ◽

Legal Perspective ◽

Islamic Financial Institutions ◽

Popular Subject

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.

Download Full-text