Legal Issues in Sharīʿah-compliant Home Financing in Malaysia: A Case Study of a <i>Bai Bithaman Ājil</i> Contract

Oseni, Umar Aimhanosi; Ayob, Mohd Fairullazi; Rashid, Khairuddin Abdul

doi:10.1108/978-1-78973-545-120191016

Cited by 4 publications

(2 citation statements)

References 4 publications

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“…This type of deferred payment transaction is also known as a credit sale, or bayʽ al-taqsit, bayʽ bi al-'ajal, or bayʽ al-mu'ajjal in Islamic jurisprudence (Engku Ali, 2009). According to Oseni et al (2019), Property Purchase Agreement (PPA) and Property Selling Agreement (PSA) are the two unique contracts utilised in a typical BBA facility for house financing based on the application side of this Islamic Finance Transaction (PSA). The bank buys the property from the customer in cash under the PPA.…”

Section: Hybrid Contract In Islamic Banking Products and Servicesmentioning

confidence: 99%

Shariah Issues on Selected Hybrid Products Practiced by Islamic Banks

Mohd Yunus,

Farhah Mahadi,

Mahmad Robbi

et al. 2023

IJARPED

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This article examines the Shariah aspects of certain hybrid products practiced by Islamic banks in Malaysia and provides a comprehensive analysis of the Shariah principles governing the implementation of these hybrid contracts. Among the hybrid contracts, bayʽ bithaman ajil (BBA) and tawarruq have raised concerns due to their potential for facilitating interest (ribā) in buying and selling transactions. On the other hand, other hybrid contracts like mushārakah mutanāqiṣah and murābaḥah to the purchase order are deemed less controversial. When applying these contracts, adherence to important Shariah principles is crucial, including the permissibility of individual contracts, independence of contracts, absence of contradictory commitments, and avoidance of any form of ribā. This study has significant implications for Islamic banking and finance institutions, as well as the Muslim community at large, by promoting the development and provision of Sharia-compliant products and enhancing confidence in their dealings with these institutions.

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Section: Hybrid Contract In Islamic Banking Products and Servicesmentioning

confidence: 99%

Shariah Issues on Selected Hybrid Products Practiced by Islamic Banks

Mohd Yunus,

Farhah Mahadi,

Mahmad Robbi

et al. 2023

IJARPED

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“…This financial service is increasingly popular among consumers and buyers (Bassir et al, 2014;N. Ibrahim & Sapian, n.d.;Oseni et al, 2019). Bank Islam reported that the half of total profit of Islamic banks is contributed by Islamic home financing (Amin,2017).…”

Section: Introductionmentioning

confidence: 99%

The Moderating Role of Islamic Corporate Social Responsibility in Shaping Customers’ Intention to Adopt Islamic Home Financing: A Conceptual Framework

Syed Noh,

Nazri

2023

IJARBSS

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As known to many, the world has witnessed the significant rise of Islamic banking in the global financial system. Like other financial institutions, Islamic banking institutions place great emphasis on consumers as they are regarded the most essential stakeholders of the institutions. Due to that fact, Islamic banking institutions greatly value viewpoints and preferences of their customers so that they can enhance products and facilities offered. This conceptual framework provides a new perspective on customers' intention to use Islamic home finance by introducing the moderating influence of Islamic Corporate Social Responsibility (iCSR) along with the behavioral control, subjective norms as well as attitude components of the Theory of Planned Behavior (TPB). By incorporating ethical considerations into the decision-making process, this framework hypothesizes that positive customer attitudes, favorable subjective norms, and enhanced behavioral control entail higher consumption intentions. Moreover, it proposes that iCSR intensifies this relationship by emphasizing the role of the ethical dimension to essentially impact the adoption of Islamic home financing among customers. Researchers and practitioners can benefit immensely obtaining valuable insights from this framework by. Also, the framework enhances understanding of the dynamics of Islamic finance adoption and provides a foundation for empirical validation and strategic decision making in the industry.

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Islamic home financing products: a study of customer intentions in Indonesia

Wulandari,

Ubaidillah

2024

IJHMA

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Purpose Islamic home financing products with Murabaha contracts are widely favored among the Muslim community in Indonesia, given that the country has a population of over 230 million Muslims. To facilitate the development of products and enhance public interest, it is important for Islamic banking institutions to comprehend the elements that may impact the intents of Muslim communities in Indonesia when selecting Islamic home financing products with Murabaha contracts. The purpose of this study is to ascertain the many aspects that may have an impact on the decision-making process of Muslim communities in Indonesia when selecting Islamic home financing product that use Murabaha contracts. Design/methodology/approach The partial least square-structural equation modeling data processing techniques will be used to process and evaluate these components. The data used in this study was acquired by administering questionnaires to a sample of 298 Muslim communities, which were randomly selected from a pool of 301 possible customers of Islamic house finance in Indonesia. Findings The results of this research show that attitude, subjective norms and perceived behavioral control have positive influence on intention to choose an Islamic home financing scheme with Murabaha agreement, while price fairness of Islamic home financing and Islamic altruism have direct and indirect influence on intention to choose Islamic home financing. Research limitations/implications Analyzing factors that affect intention to choose Islamic home financing product under Murabaha contract is essential. Future study is required to analyze other Islamic home financing products, such as istisna, ijarah muntahia bi tamlik and diminishing musharakah. This study only serves as a foundation for further investigations into conventional approaches to home financing in emerging nations. The areas can be expanded to be implemented in other countries. Practical implications It is anticipated that Islamic banks have the capacity to cultivate a favorable and constructive perception, hence fostering a positive disposition among the Muslim populace in Indonesia. Furthermore, it is essential for Islamic banks to guarantee that all stakeholders within the sharia-compliant institution, particularly the frontline staff, have enough expertise and understanding of the intricacies of Islamic home financing products including Murabaha contracts, which are intended for prospective customers. In the foreseeable future, it is anticipated that the Muslim population in Indonesia would exhibit a greater intention toward the use of Islamic home financing solutions that use Murabaha contracts, facilitated by the establishment of a conducive environment. Originality/value This research integrates the impacts of pricing fairness and Islamic charity as a modified model, alongside the theory of planned behavior model, to examine the influence of these factors on individuals’ intentions to use Islamic home financing in Indonesia.

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Legal Issues in Sharīʿah-compliant Home Financing in Malaysia: A Case Study of a Bai Bithaman Ājil Contract

Cited by 4 publications

References 4 publications

Shariah Issues on Selected Hybrid Products Practiced by Islamic Banks

Shariah Issues on Selected Hybrid Products Practiced by Islamic Banks

The Moderating Role of Islamic Corporate Social Responsibility in Shaping Customers’ Intention to Adopt Islamic Home Financing: A Conceptual Framework

Islamic home financing products: a study of customer intentions in Indonesia

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