THE COMMODITY MURABAHAH IN MALAYSIAN ISLAMIC FINANCE: THE LESSONS LEARNT AND PRACTICAL RECOMMENDATION

Mohd Yusoff, Syarah Syahira and Hassan, Rusni and Muhammad Noor, Fatimah (2024) THE COMMODITY MURABAHAH IN MALAYSIAN ISLAMIC FINANCE: THE LESSONS LEARNT AND PRACTICAL RECOMMENDATION. In: THE 3RD INTERNATIONAL CONFERENCE ON ISLAMIC ECONOMICS 2024 EPROCEEDING (3RD ICONIE 2024), Holiday Hotel in Sarajevo, Bosnia & Herzegovina.

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Abstract

Prior to the introduction of commodity murbahah in Islamic banking products and services in Malaysia, the concept of bay’ ‘inah had become the main underlying contract for most deposit and financing products. However, its application has led to disagreement among Shariah scholars regarding its permissibility. To resolve this, the commodity murabahah was introduced as an alternative. The main purpose of this study is to discuss the current practice of the commodity murabahah in the Islamic banking system in Malaysia. This study uses a qualitative research method by analysing and reviewing relevant literature and documents in order to comprehend the operational structure of commodity murabahah in the Islamic banking system in Malaysia. This study found that the practice of commodity murabahah is well-supported by a robust legal framework to overcome any disputes related to commodity murabahah practices. Moreover, it is evident that the establishment of Bursa Suq Al-Sila (BSAS) is aimed at facilitating the liquidity management of the Islamic as well as enhancing the transparency and efficiency of the commodity murabahah transactions. This conceptual study is confined to only the discussion of the concepts and practices of commodity murabahah in different types of Malaysian Islamic banking products and services. The lesson learnt from exploring the practice of commodity murabahah in Malaysia provides a better understanding of the importance of a sound governance framework to support the growth and diversification of Islamic finance products and to provide better Shariah scrutiny.

Item Type:	Proceeding Paper (Other)
Subjects:	BPH Islamic Economics BPH Islamic Economics > BPH754.4 Murabahah - Cost-Plus Financing
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	DR Syarah Syahira Mohd Yusoff
Date Deposited:	13 Dec 2024 09:55
Last Modified:	13 Dec 2024 09:55
URI:	http://irep.iium.edu.my/id/eprint/116593

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