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The application of wadi’ah contract by some financial institutions in Malaysia

Ibrahim, Ahmad Basri and Mohd Noor, Azman and Sahrir, Muhammad Sabri (2012) The application of wadi’ah contract by some financial institutions in Malaysia. In: IIUM Research, Invention and Innovation Exhibition, IRIIE 2012, 21-22 February, 2012., Cultural Activity Centre (CAC) and KAED Gallery, IIUM.. (In Press)

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Abstract

Islamic finance emancipated as a replacement for the conventional financial practices that aims only at profit making i.e. capitlist oriented finance. Although both are termed finance, but Islamic finance has two major distinguish features which are: the motive is not profit making only rather seeking the pleasure of Allah’s mercy in the hereafter. The second feature is the use of asset backed-up transactions and profit distribution system as agreed at fore hand. These features manifested in the dealings of the Islamic Financial Institutions (IFIs) established to excute the aims and objectives of Islam and Muslims as the vicegerent of Allah on earth and one who are bound by injunctions in all their transactions. In order to achieve these objectives Islamic banks have moved in an alternative bearing from the conventional banks in practices and brands of products. One of these products is rebranding of the conventional savings account with the Wadi‘ah account. Therefore, this paper aims at explaining the concept of wadi‘ah, the evidences of its legitimacy, conditions, prohibited elements in this transaction, its types and how its application in some financial institutions in Malaysia. Finally, we found out that, modern wadi‘ah took a different shape from the original wadi‘ah. While original wadi‘ah is based on Amanah (turst), contemporary wadi’ah is based on daman (liability) which is more or less loan.

Item Type: Conference or Workshop Item (Poster)
Additional Information: 2906/18063
Uncontrolled Keywords: financial institution; wadi'ah contract
Subjects: H Social Sciences > HG Finance > HG1501 Banking
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Islamic Revealed Knowledge and Human Sciences > Department of Arabic Language and Literature
Depositing User: Dr Muhammad Sabri Sahrir
Date Deposited: 27 Apr 2012 11:42
Last Modified: 27 Apr 2012 11:42
URI: http://irep.iium.edu.my/id/eprint/18063

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