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TꜤawīḍ and Gharāmah as financial compensation: application to corporates and government bodies

Abstract: In spite of the growth of Islamic financial institutions, they have been suffering from troubles due to late payment, which lessen the economic feasibility of these institutions reducing their incomes and capability to compete with conventional banks. Furthermore, payment default is a comm...

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Main Authors: Hassan, Rusni, Ali, Jawwad, Mohamad Noor, Fatimah Azzahra
Format: Article
Language:English
Published: ElectronicPublications.Org Ltd 2022
Subjects:
HG3368 Islamic Banking and Finance
Online Access:http://irep.iium.edu.my/103204/2/103204_T%EA%9C%A4aw%C4%AB%E1%B8%8D%20and%20Ghar%C4%81mah%20as%20financial%20compensation.pdf
http://irep.iium.edu.my/103204/
https://www.electronicpublications.org/stuff/928
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spelling my.iium.irep.1032042023-01-13T08:04:07Z http://irep.iium.edu.my/103204/ TꜤawīḍ and Gharāmah as financial compensation: application to corporates and government bodies Hassan, Rusni Ali, Jawwad Mohamad Noor, Fatimah Azzahra HG3368 Islamic Banking and Finance Abstract: In spite of the growth of Islamic financial institutions, they have been suffering from troubles due to late payment, which lessen the economic feasibility of these institutions reducing their incomes and capability to compete with conventional banks. Furthermore, payment default is a common phenomenon these days in most societies. Therefore, this article focuses on the different Fiqh approaches to TꜤawīḍ (compensation) and Gharāmah (penalty) as financial compensation to the lending institution and a form of punishment for the debtor. The article also demonstrates the methods of determining the actual cost for TꜤawīḍ. Moreover, the article highlights the implementation of TꜤawīḍ and Gharāmah in Islamic Banks in Malaysia. To achieve this objective, a qualitative approach has been adopted. The article recommends that Islamic financial institutions should avoid charging indirect costs as it is very close to Ribā (usuary). The article also proposes that instead of using the word ‘Gharāmah’, it is appropriate to use the phrase ‘Iltizām bi al-Taṣadduq/al-TabarrꜤu’ to proclaim the imposition of financial penalty by government, corporate bodies and even individuals. ElectronicPublications.Org Ltd 2022 Article PeerReviewed application/pdf en http://irep.iium.edu.my/103204/2/103204_T%EA%9C%A4aw%C4%AB%E1%B8%8D%20and%20Ghar%C4%81mah%20as%20financial%20compensation.pdf Hassan, Rusni and Ali, Jawwad and Mohamad Noor, Fatimah Azzahra (2022) TꜤawīḍ and Gharāmah as financial compensation: application to corporates and government bodies. Manchester Journal of Transnational Islamic Law and Practice, 18 (2). pp. 85-100. E-ISSN 2633-6626 https://www.electronicpublications.org/stuff/928
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HG3368 Islamic Banking and Finance
spellingShingle HG3368 Islamic Banking and Finance
Hassan, Rusni
Ali, Jawwad
Mohamad Noor, Fatimah Azzahra
TꜤawīḍ and Gharāmah as financial compensation: application to corporates and government bodies
description Abstract: In spite of the growth of Islamic financial institutions, they have been suffering from troubles due to late payment, which lessen the economic feasibility of these institutions reducing their incomes and capability to compete with conventional banks. Furthermore, payment default is a common phenomenon these days in most societies. Therefore, this article focuses on the different Fiqh approaches to TꜤawīḍ (compensation) and Gharāmah (penalty) as financial compensation to the lending institution and a form of punishment for the debtor. The article also demonstrates the methods of determining the actual cost for TꜤawīḍ. Moreover, the article highlights the implementation of TꜤawīḍ and Gharāmah in Islamic Banks in Malaysia. To achieve this objective, a qualitative approach has been adopted. The article recommends that Islamic financial institutions should avoid charging indirect costs as it is very close to Ribā (usuary). The article also proposes that instead of using the word ‘Gharāmah’, it is appropriate to use the phrase ‘Iltizām bi al-Taṣadduq/al-TabarrꜤu’ to proclaim the imposition of financial penalty by government, corporate bodies and even individuals.
format Article
author Hassan, Rusni
Ali, Jawwad
Mohamad Noor, Fatimah Azzahra
author_facet Hassan, Rusni
Ali, Jawwad
Mohamad Noor, Fatimah Azzahra
author_sort Hassan, Rusni
title TꜤawīḍ and Gharāmah as financial compensation: application to corporates and government bodies
title_short TꜤawīḍ and Gharāmah as financial compensation: application to corporates and government bodies
title_full TꜤawīḍ and Gharāmah as financial compensation: application to corporates and government bodies
title_fullStr TꜤawīḍ and Gharāmah as financial compensation: application to corporates and government bodies
title_full_unstemmed TꜤawīḍ and Gharāmah as financial compensation: application to corporates and government bodies
title_sort tꜥawīḍ and gharāmah as financial compensation: application to corporates and government bodies
publisher ElectronicPublications.Org Ltd
publishDate 2022
url http://irep.iium.edu.my/103204/2/103204_T%EA%9C%A4aw%C4%AB%E1%B8%8D%20and%20Ghar%C4%81mah%20as%20financial%20compensation.pdf
http://irep.iium.edu.my/103204/
https://www.electronicpublications.org/stuff/928
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score 13.211869

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