Implementation of Muñómalah Hire-Purchase Bill in Malaysia: Chasing a Mirage?

Abstract

Islamic hire-purchase (Al-Ijūrah Thumma Al-Baiʿ or AITAB) is one of the innovative products of Islamic banks in Malaysia. Since its first inception more than 10 years ago, AITAB has been governed by the Hire- Purchase Act 1967 (hereinafter referred to as ‘the HPA’). Notwithstanding the surge in popularity of AITAB amongst the general public, the product has received much criticism due to its inherent limitations especially with regard to its regulatory framework. Critics of AITAB posit the inherent limitation of the HPA to effectively and efficiently govern AITAB transactions particularly when dealing with Sharîʿah issues. Consequently, Muʿāmalah Hire-Purchase Bill had been proposed to the Malaysian government to overcome certain limitations of the HPA. The issue was, whether AITAB would be best governed by having an independent regulation (known as Muʿāmalah Bill), or by simply incorporating Sharīʿah principles within the existing regulation (HPA). Unfortunately in recent years, the Attorney General has rejected the idea of an independent Muʿāmalah Bill due to certain factors. To better comprehend the rationale for this rejection, this paper discusses the overall regulatory framework of AITAB operations in Malaysia based on 46 expert interviews. In particular, the paper provides important insights into the advantages and disadvantages of implementing either a distinct Muʿāmalah Bill or harmonising the existing HPA with Sharīʿah principles of hire-purchase.

Islamic Hire Purchase Law is Getting Special Attention in Malaysia: A Socio-Legal Analysis

“…The majority of the provisions provided in the HPA 1967 can be adopted into the Islamic hire purchase law (AITAB) as they are not contradictory with the shariah principles. Abdullah (2009) has also similarly viewed in her article that:…”

“…However, there are some provisions in the HPA that are not in conformity with the shariah (Islamic law) principles. Abdullah (2009) has argued that the HPA 1967 is not fully suitable for the Muslims in Malaysia and accordingly, therefore, she proposes for a separate Islamic hire purchase law which can be named as Muamalah Hire Purchase Bill (herein after referred to as MHPB). As mentioned in the abstract, such a Bill has in fact been prepared by some Muslim scholars in Malaysia.…”

Objectives of Islamic banking, customer satisfaction and customer loyalty: empirical evidence from South Africa

“…The literature indicates that customers are mostly satisfied with the products and services offered by their Islamic banks (Amin and Isa, 2008; Wahla et al , 2018). Some studies also suggest that customers are satisfied with the product portfolio, ijarah (leasing) facilities, communication, service costs and bank reputation (Abdullah and Dusuki, 2006; Estiri et al , 2011; Wahla et al , 2018). However, in some cases, customers were not satisfied with the Islamic bank’s limited branch networks and operating times (Naser et al , 1999).…”

Pemindahan Hak Milik Dalam Instrumen Al-Ijarah Thumma Al-Bay’ (AITAB) di Malaysia

“…Justeru terma-terma dan syarat dalam suatu perjanjian AITAB dibuat berasaskan kepada Akta konvensional tersebut dengan beberapa pengubahsuaian untuk menjadikannya patuh Syariah (Abdullah, 2009). Walau bagaimanapun pemakaian undang-undang sivil terhadap instrumen kewangan Islam boleh menyebabkan berlakunya kontradiksi antara undang-undang sivil dengan peraturan Shariah (Najahudin, Mohamed Azam, Siti Noorbiah, & Mardhiyyah, 2010).…”

“…Walau bagaimanapun pemakaian undang-undang sivil terhadap instrumen kewangan Islam boleh menyebabkan berlakunya kontradiksi antara undang-undang sivil dengan peraturan Shariah (Najahudin, Mohamed Azam, Siti Noorbiah, & Mardhiyyah, 2010). Selain itu, Akta tersebut juga merupakan suatu perundangan yang ketat dan ketidakpatuhan kepada Akta tersebut boleh menjadikan suatu perjanjian sewa beli tidak diiktiraf dan tidak boleh dikuatkuasakan di bawah Akta tersebut (Abdullah, 2009). Oleh itu kajian ini adalah wajar bagi mengenal pasti isu-isu Shariah dan perundangan yang mungkin timbul dalam aspek pemindahan hak milik aset dalam instrumen AITAB serta mencari cadangan penyelesaian kepada isu-isu tersebut.…”