An Empirical Study on the Practices of Inah and Ujrah Concept in Islamic Banking Credit Card (Case Study in Malaysia)

Jamaan, Gustina; Puad, Noor Aimi Mohamad; Ramli, Ruzanna

doi:10.2139/ssrn.2418291

Cited by 1 publication

(3 citation statements)

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“…Thus, an Islamic bank is depended on the management for other service charges like monthly and annual charge, fixed management charge as their main profits. (Jamaan et al, 2014).…”

Section: Application Of Ujrah Concept In Islamic Credit Cardmentioning

confidence: 99%

“…Also, AAOIFI allows Islamic banks to offer services along with international credit card organizations, such as MasterCard, Visa, or American Express. It allows the bank to charge the customer, but not to engage in any payment which involves interest (Johan, 2018) (Azman, 2015) (Jamaan et al, 2014) and (BNM, 2010).…”

Section: The Permissibility Of Ujrah In Shariahmentioning

confidence: 99%

“…They argue that it is a modern way of reviving riba and a hilah (trick) to legitimize interest rate, which is a non-Islamic structure. The two models, that is, the concept of inah and tawarruq have been disapproved by the majority of the Islamic scholars in the Hambali, Maliki, and Hanafi schools of jurisprudence, are sales contract intended as a ploy to allow debt with riba (interest) (Azman, 2015;Jamaan et al, 2014); (Ibn kudamah, 1968). However, this problem makes some Islamic banks come with other options that scholars agree with in the use of Ujrah as the best substitute for inah (Jamaan et al, 2014).…”

Section: The Issues Related To the Practice Of Ujrah-based Islamic Credit Cardmentioning

confidence: 99%

See 2 more Smart Citations

The Islamic Credit Card Based on Ujrah Concept:

Balarabe¹,

Abdullah

2020

JEEIR

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Islam is a way of life that seeks to protect the human being from financial harm through prohibiting riba, maysir, and gharar. Islamic credit card is one of the alternative banking products offered by Islamic financial institutions to replace the conventional credit card. The Islamic credit card was initially based on the Inah concept. However, this concept was criticized by both contemporary and classical Islamic jurists, especially in the Hambali, Maliki, and Hanafi school of thought. Therefore, some Islamic banks of Malaysia offer a better alternative, developing the credit card on the concept of ujrah, which is less ambiguous among Islamic scholars. This study will explore the background of Islamic credit card base on the concept of ujrah. It will then further discuss the justification for the permissibility of the concept. Finally, this paper will highlight the issues related to the practice of ujrah in Islamic credit card operations. The findings indicate that the credit cards based on ujrah (fee) are permitted from the Sharia perspective as long as they do not involve any element of riba (interest). However, it involves Shariah issues on its practice of ibra (rebate) and penalty charge. To fulfil the objective of the study, it will refer to the Quran, Hadith, classical Islamic jurisprudence, juristic opinion of Islamic scholars, Shariah standards of international Islamic standard-setting bodies, and other policy documents of the Islamic banks.

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“…Thus, an Islamic bank is depended on the management for other service charges like monthly and annual charge, fixed management charge as their main profits. (Jamaan et al, 2014).…”

Section: Application Of Ujrah Concept In Islamic Credit Cardmentioning

confidence: 99%

Section: The Permissibility Of Ujrah In Shariahmentioning

confidence: 99%