Skip to:Content
|
Bottom

Explore Collection
Islamic Finance Links
Visiting & Membership
Knowledge Partners
Giving to Knowledge
Frequently Asked Question



Notice of Closure:

 





KMC Curated Contents 



Top Search Term


INCEIF Knowledge Portal: To facilitate discovery and allow users to access relevant research materials quickly and easily.



KMC Guides

KMC Guides

New Arrivals

Past Examination Papers

Events



 Announcements

Top Search Term July

 Guideline on Resources, Services and Facilities.

 Islamic Finance Highlights



Ahmad, Zaki and Zahir, Faathih and Usman, Ahmed Mohamud and Muneeza, Aishath and Mustapha, Zakariya.


"Tawarruq which is also known as commodity murabahah in Islamic banking is widely practiced in Malaysia to structure different types of Islamic banking products. The widespread use of tawarruq has made Islamic banks to be re-named as "tawarruq banks" and some even call tawarruq as the "magic lamp" of the industry. Shariah scholars have criticised this frequent usage of tawarruq in Islamic banking industry of Malaysia, while the practitioners have replied by saying that if tawarruq is a shariah approved concept, then what is wrong with the usage of it? However, from the shariah perspective, the issue here is not about the shariah compliance of tawarruq transactions per se. It is about the shariah limitations imposed by the scholars on the use of it. This simply means that there is a reservation made by shariah scholars in allowing the usage of tawarruq contract in Islamic finance as tawarruq is a contract allowed to be used when one has to choose between a conventional loan and tawarruq. The purpose of this research is thus to show the alternative Islamic commercial contracts that could be used to structure Islamic banking products that have been structured in the market using tawarruq. It is anticipated that the outcome of this research will assist Islamic banking industry to understand why and how they can move away from tawarruq."


View Article

 Featured Database


Last Updated: 5th November 2020

Go to:Top of Page