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The application of profit-loss sharing (PLS) contracts in Malaysian Islamic financial industries: Perspectives, challenges and prospects

Regardless of the quasi unanimity of Islamic economics and finance scholars on the importance of Mudarabah and Musharakah in the Islamic financial institutions (IFIs), and together with the dominance of the concept of profit-loss sharing (PLS) in the theoretical literature, the allocation of most Is...

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Main Authors: Zainol, Zairani, Abdul Jalil, Ahmad Zafarullah, Md Dahlan, Nuarrual Hilal
Format: Conference or Workshop Item
Language:English
Published: 2015
Subjects:
HG Finance
Online Access:http://repo.uum.edu.my/17936/1/ICMFE%202015%2053-60.pdf
http://repo.uum.edu.my/17936/
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spelling my.uum.repo.179362016-04-18T00:28:09Z http://repo.uum.edu.my/17936/ The application of profit-loss sharing (PLS) contracts in Malaysian Islamic financial industries: Perspectives, challenges and prospects Zainol, Zairani Abdul Jalil, Ahmad Zafarullah Md Dahlan, Nuarrual Hilal HG Finance Regardless of the quasi unanimity of Islamic economics and finance scholars on the importance of Mudarabah and Musharakah in the Islamic financial institutions (IFIs), and together with the dominance of the concept of profit-loss sharing (PLS) in the theoretical literature, the allocation of most Islamic funds specifically in Islamic banks is confined to short-term and low-risk investments.This study has been conducted to find the factors leading to the paradoxical differences between what is being idealized and what are being practiced in the Malaysian Islamic finance and banking industry.The findings of this study were based on primary data gathered through interviews with eight (8) Islamic Financial Institutions (IFIs).This study found a number of factors why IFls seem to be reluctant to implement Mudarabah and Musharakah contracts. among them are because of the attitude of the Islamic financial service providers, high level of risks, the role of the bank as fund provider instead of partner or investor, inadequate demand from customers, complexity in implementing the products, stringent regulations and lack of expertise and skilled staff. Based on the findings of this study, several recommendations that can be implemented in order to encourage wider application of Musharakah and Mudarabah contracts by the (IFIs) have been suggested. 2015-10-17 Conference or Workshop Item PeerReviewed application/pdf en http://repo.uum.edu.my/17936/1/ICMFE%202015%2053-60.pdf Zainol, Zairani and Abdul Jalil, Ahmad Zafarullah and Md Dahlan, Nuarrual Hilal (2015) The application of profit-loss sharing (PLS) contracts in Malaysian Islamic financial industries: Perspectives, challenges and prospects. In: 6th International Conference on Management, Finance and Entrepreneurship, 17-18 October 2015, Istanbul, Turkey.
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
Zainol, Zairani
Abdul Jalil, Ahmad Zafarullah
Md Dahlan, Nuarrual Hilal
The application of profit-loss sharing (PLS) contracts in Malaysian Islamic financial industries: Perspectives, challenges and prospects
description Regardless of the quasi unanimity of Islamic economics and finance scholars on the importance of Mudarabah and Musharakah in the Islamic financial institutions (IFIs), and together with the dominance of the concept of profit-loss sharing (PLS) in the theoretical literature, the allocation of most Islamic funds specifically in Islamic banks is confined to short-term and low-risk investments.This study has been conducted to find the factors leading to the paradoxical differences between what is being idealized and what are being practiced in the Malaysian Islamic finance and banking industry.The findings of this study were based on primary data gathered through interviews with eight (8) Islamic Financial Institutions (IFIs).This study found a number of factors why IFls seem to be reluctant to implement Mudarabah and Musharakah contracts. among them are because of the attitude of the Islamic financial service providers, high level of risks, the role of the bank as fund provider instead of partner or investor, inadequate demand from customers, complexity in implementing the products, stringent regulations and lack of expertise and skilled staff. Based on the findings of this study, several recommendations that can be implemented in order to encourage wider application of Musharakah and Mudarabah contracts by the (IFIs) have been suggested.
format Conference or Workshop Item
author Zainol, Zairani
Abdul Jalil, Ahmad Zafarullah
Md Dahlan, Nuarrual Hilal
author_facet Zainol, Zairani
Abdul Jalil, Ahmad Zafarullah
Md Dahlan, Nuarrual Hilal
author_sort Zainol, Zairani
title The application of profit-loss sharing (PLS) contracts in Malaysian Islamic financial industries: Perspectives, challenges and prospects
title_short The application of profit-loss sharing (PLS) contracts in Malaysian Islamic financial industries: Perspectives, challenges and prospects
title_full The application of profit-loss sharing (PLS) contracts in Malaysian Islamic financial industries: Perspectives, challenges and prospects
title_fullStr The application of profit-loss sharing (PLS) contracts in Malaysian Islamic financial industries: Perspectives, challenges and prospects
title_full_unstemmed The application of profit-loss sharing (PLS) contracts in Malaysian Islamic financial industries: Perspectives, challenges and prospects
title_sort application of profit-loss sharing (pls) contracts in malaysian islamic financial industries: perspectives, challenges and prospects
publishDate 2015
url http://repo.uum.edu.my/17936/1/ICMFE%202015%2053-60.pdf
http://repo.uum.edu.my/17936/
_version_ 1644282338156216320
score 13.211869

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