FINANCE OF LOW-URBANIZED TERRITORIES AS AN INTEGRAL PART OF THE PUBLIC FINANCE SYSTEM

The article analyses the historical preconditions for the formation and development of local finances. Diverse directions of development of local finances in different countries, in different economic systems, are identified. The signs of public finances at the level of low-urbanized territories in modern conditions are formulated. it is proved that the formation of local finance subsystem as a component of public finance cannot be considered in isolation from the processes of formation of local self-government: the subjectivity of local authorities itself, whose decisions should have an overwhelming influence on the current socio-economic processes in a community and determine strategic priorities for its development, cannot be implemented without proper financial support.

NON-PERFORMING PROPERTY LOANS AND ITS ORIGINATION IN THE REAL ESTATE FINANCE SYSTEM: CASE STUDY OF MALAYSIA

A healthy real estate finance system is crucial for any economy to grow and thrive. However, in recent years, the sustainability and soundness of the Malaysian Real Estate Finance System had been in question as the number of non-performing property loans had been on the rise. This paper looks into how property NPLs originate within the real estate finance system in Malaysia and its current performance in Malaysia. A descriptive research design was conducted utilizing in-depth case studies of Malaysia to examine Malaysia’s real estate finance system consisting of loan originators in the primary market and the special purpose vehicle involved at the secondary mortgage market where it was found that the Malaysian Real Estate Finance System is efficiently developed and on par with other developed countries with a robust primary mortgage market, effective secondary mortgage market and a vibrant capital market. Further analysis found that there are a total of 57 financial institutions that are property loan originators in Malaysia that consists of 26 Commercial Banks, 16 Islamic Banks, 2 International Islamic Banks, 11 Investment Banks, and 2 Special Financial Institutions. In terms of NPLs in Malaysia, property loans are the largest component of total NPLs in the country, and subsequent analysis found that the number of property NPLs in the country had been rising since 2015, after a long decade decline. This study warrants further research into the causes of property NPLs in the country so that the causes of property NPLs can be monitored as part of the country's strategic monetary policy to control and reduce the number of property NPLs in the country. Ultimately, this also helps to contribute towards a sound and robust real estate finance system in Malaysia.

Editorial: The Riba¯ Case Pending for three Decades: The Federal Shar¯ı‘at Court, Pakistan may Fulfill its Constitutional Responsibility by Outlawing the Interest

While Islamic banking is being promoted by the State Bank of Pakistan (SBP) working parallel with theconventional banking since 2002, the Constitution of Pakistan requires that interest must be outlawed from The economy as early as possible [Article 38 (f)]. The legal trajectory of interest made its way to the Federal Shar¯ı‘at Court (FSC) after the 10-years moratorium on adjudicating fiscal and banking matters ended at the end of May 1990. The FSC and subsequently the Shar¯ı‘at Appellate Bench (SAB) of the Supreme Court of Pakistan delivered their landmark judgments in 1991 and 1999 respectively, but the state officials opted to hide behind some constitutional provisions, or the presumed view of some jurists /scholars to plead that the ‘interest" was not that rib¯a as prohibited by Qur’¯an. Although, the connotation of rib¯a has long been agreed at the level of Islamic ummah to include moderncommercial interest in rib¯a, and e_orts for evolving ‘interest-free’ banking and finance system are underway also including Pakistan, but there have been some hindrances in implementation of Islamic injunctions and the Shar¯ı‘at Courts’ judgments. The rib¯a case being reheard in the FSC since 2013, after it was remanded back by the SAB in 2001 is becoming gradually complicated. The debt trap for Pakistan’s economy is becoming increasingly painful requiring to transfer almost all resources for servicing the debt. However, little e_ort hasbeen made to transform the economy of Pakistan to risk and reward sharing and cooperative bases in the light of Islamic principles. During the hearing of the case in May this year the representatives of the state contended that "the non-justiciable policy decisions regarding implementable possibilities were beyond the jurisdiction ofthe Shar¯ı‘at Court.