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Issue of Bai‘ Wa Salaf (Combination of Sale and Loan Contract) in Tawarruq Based Deposit Product: A Practitioner’s Perspective

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  • Abdul Rahim, Mohamad Syafiqe

Abstract

The Malaysia Islamic banking market has expanded rapidly and it continues to embrace innovative structure, as underlined by the launch of Islamic banking products using various Shariah concepts. One of the most popular Shariah concept used by Islamic Banks across all market segment in Malaysia is Tawarruq (Commodity Murabahah). In recent years, Centre Bank of Malaysia has been issuing various Shariah resolutions and Shariah related policies to be complied by Islamic banks. Whilst this initiative is praiseworthy in strengthening and standardising the Shariah compliance culture, there are several issues which may impact the operational aspect of a bank. This paper will focus to discuss on the Shariah and operational concerns in Tawarruq based deposit product where the analysis will focus on the issue of prohibition of Bai` Wa Salaf. In addition, this paper will also provide some example of financial structures which already in Malaysia market as case study and reference. This article is based on qualitative research approach which is purely based on primary data gathered through library research and interview.

Suggested Citation

  • Abdul Rahim, Mohamad Syafiqe, 2025. "Issue of Bai‘ Wa Salaf (Combination of Sale and Loan Contract) in Tawarruq Based Deposit Product: A Practitioner’s Perspective," MPRA Paper 123099, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:123099
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    More about this item

    Keywords

    Bai` Wa Salaf; Tawarruq; Deposit Product; Islamic Banking; Shariah;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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