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Gap analysis between BNM regulation and musharakah mutanaqisah application in Islamic banking

Bank Negara Malaysia resolved the utilization of Musharakah Mutanaqisah on the Shari’ah Advisory Committee 56th meeting in 2010. In practice, most of the banks have adopted Musharakah Mutanaqisah for the purpose of home financing. This study examines the gap between the BNM regulation and as practic...

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Main Authors: Rahman, Audia Syafa'atur, Ahamed Hilmy, Hayathu Mohammed, Saifurrahman, Adi, Hassan, Rusni
Format: Article
Language:English
Published: IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia (IIUM). 2018
Subjects:
HB126.4 Islamic Economics
HG3368 Islamic Banking and Finance
Online Access:http://irep.iium.edu.my/56161/1/56161_Gap%20Analysis%20Between%20BNM%20Regulation.pdf
http://irep.iium.edu.my/56161/
http://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/214
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spelling my.iium.irep.561612018-06-11T02:55:27Z http://irep.iium.edu.my/56161/ Gap analysis between BNM regulation and musharakah mutanaqisah application in Islamic banking Rahman, Audia Syafa'atur Ahamed Hilmy, Hayathu Mohammed Saifurrahman, Adi Hassan, Rusni HB126.4 Islamic Economics HG3368 Islamic Banking and Finance Bank Negara Malaysia resolved the utilization of Musharakah Mutanaqisah on the Shari’ah Advisory Committee 56th meeting in 2010. In practice, most of the banks have adopted Musharakah Mutanaqisah for the purpose of home financing. This study examines the gap between the BNM regulation and as practiced by Maybank Islamic and HSBC Amanah. The method of analysis adopts a qualitative study based on the library research. The study discovered one major gap and three minor gaps. The major gap is related to charging an early settlement fee by HSBC Amanah. In addition, three minor gaps are related to wa’ad statement in both banks, the pledge statement with respect to Maybank, and default approach compliance in both banks. However, this study does not examine the gap that related to the contract validity. Nevertheless, the discovery of a single gap found may affect contract validity of the product. This study recommends for better monitoring and supervision conducted by all stakeholders. BNM Shari’ah Advisory Council and respective Islamic bank committees should verify the practice that may cause the contract to become void. In addition, Islamic financial institutions should strictly follow all the regulations issued by the Bank Negara Malaysia in all their practices and publication in order to make the contracts acceptable according to Shari’ah and to cater public confidence. Adhering to guidelines along with the Shari’ah standard of the product further increases accountability and trustworthy of Shari’ah compliance in a particular product. IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia (IIUM). 2018 Article REM application/pdf en http://irep.iium.edu.my/56161/1/56161_Gap%20Analysis%20Between%20BNM%20Regulation.pdf Rahman, Audia Syafa'atur and Ahamed Hilmy, Hayathu Mohammed and Saifurrahman, Adi and Hassan, Rusni (2018) Gap analysis between BNM regulation and musharakah mutanaqisah application in Islamic banking. Journal of Islamic Finance, 7 (1). pp. 38-50. ISSN 2289-2109 http://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/214
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 HB126.4 Islamic Economics
HG3368 Islamic Banking and Finance
spellingShingle HB126.4 Islamic Economics
HG3368 Islamic Banking and Finance
Rahman, Audia Syafa'atur
Ahamed Hilmy, Hayathu Mohammed
Saifurrahman, Adi
Hassan, Rusni
Gap analysis between BNM regulation and musharakah mutanaqisah application in Islamic banking
description Bank Negara Malaysia resolved the utilization of Musharakah Mutanaqisah on the Shari’ah Advisory Committee 56th meeting in 2010. In practice, most of the banks have adopted Musharakah Mutanaqisah for the purpose of home financing. This study examines the gap between the BNM regulation and as practiced by Maybank Islamic and HSBC Amanah. The method of analysis adopts a qualitative study based on the library research. The study discovered one major gap and three minor gaps. The major gap is related to charging an early settlement fee by HSBC Amanah. In addition, three minor gaps are related to wa’ad statement in both banks, the pledge statement with respect to Maybank, and default approach compliance in both banks. However, this study does not examine the gap that related to the contract validity. Nevertheless, the discovery of a single gap found may affect contract validity of the product. This study recommends for better monitoring and supervision conducted by all stakeholders. BNM Shari’ah Advisory Council and respective Islamic bank committees should verify the practice that may cause the contract to become void. In addition, Islamic financial institutions should strictly follow all the regulations issued by the Bank Negara Malaysia in all their practices and publication in order to make the contracts acceptable according to Shari’ah and to cater public confidence. Adhering to guidelines along with the Shari’ah standard of the product further increases accountability and trustworthy of Shari’ah compliance in a particular product.
format Article
author Rahman, Audia Syafa'atur
Ahamed Hilmy, Hayathu Mohammed
Saifurrahman, Adi
Hassan, Rusni
author_facet Rahman, Audia Syafa'atur
Ahamed Hilmy, Hayathu Mohammed
Saifurrahman, Adi
Hassan, Rusni
author_sort Rahman, Audia Syafa'atur
title Gap analysis between BNM regulation and musharakah mutanaqisah application in Islamic banking
title_short Gap analysis between BNM regulation and musharakah mutanaqisah application in Islamic banking
title_full Gap analysis between BNM regulation and musharakah mutanaqisah application in Islamic banking
title_fullStr Gap analysis between BNM regulation and musharakah mutanaqisah application in Islamic banking
title_full_unstemmed Gap analysis between BNM regulation and musharakah mutanaqisah application in Islamic banking
title_sort gap analysis between bnm regulation and musharakah mutanaqisah application in islamic banking
publisher IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia (IIUM).
publishDate 2018
url http://irep.iium.edu.my/56161/1/56161_Gap%20Analysis%20Between%20BNM%20Regulation.pdf
http://irep.iium.edu.my/56161/
http://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/214
_version_ 1643616533589524480
score 13.211869

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