Demystifying the contractual duty of care of Islamic banks in Malaysia

Abu Bakar, Noor Mahinar and Mohd Yasin, Norhashimah (2019) Demystifying the contractual duty of care of Islamic banks in Malaysia. Intellectual Discourse, 27 (S1 (Special Issue on Disability Studies)). pp. 695-718. ISSN 0128-4878 E-ISSN 2289-5639

	PDF - Published Version Restricted to Registered users only Download (5MB) | Request a copy
	PDF (SCOPUS) - Supplemental Material Restricted to Registered users only Download (216kB) | Request a copy
	PDF (WOS) - Supplemental Material Restricted to Registered users only Download (333kB) | Request a copy

Abstract

The general relationship between a bank and customer is contractual in nature. For conventional banks, the banker-customer relationship is based on the debtor-creditor relationship with the bank earning a profit from a spread made between interest charged on the borrower of funds and interest paid to the depositors. In Islamic banking, due to the different contractual transactions of Islamic banking operation, it is based on a multi-contractual relationships. However, bank consumers perceive that banks enhance their profits by treating consumers unfairly and failing to take responsibility when things go wrong. This study examines the duty of care of conventional and Islamic banks towards bank consumers. It also focuses on the Islamic banks’ duty of care from the perspective of maqāṣid al-Sharī‛ah, to those who use their services. Adopting the doctrinal analysis method, this study analyses and compares the duty of care of both conventional and Islamic banks. Findings of this study include that misconduct by banking industries remains rife and that unfair treatment of customers are frequent. As for Islamic banks, the maqāṣid al-Sharī‛ah based duty of care is found missing in their Islamic banking operation. This study suggests that the duty of care for both banks should be reformed to improve bank consumers’ experience. For Islamic banks, an improved standard is useful in performing their duties based on Islamic values.

Item Type:	Article (Journal)
Additional Information:	580/79864
Uncontrolled Keywords:	Banker-customer Relationship, Duty of Care, Islamic banks, Maqāṣid al-Sharī‛ah, Malaysia
Subjects:	H Social Sciences > HG Finance > HG1501 Banking
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Ahmad Ibrahim Kulliyyah of Laws Ahmad Ibrahim Kulliyyah of Laws > Department of Civil Law
Depositing User:	Prof. Dr. Norhashimah Mohd Yasin
Date Deposited:	27 Mar 2020 10:23
Last Modified:	27 Mar 2020 10:24
URI:	http://irep.iium.edu.my/id/eprint/79864

Actions (login required)

View Item