Charging fee for kafalah and its contemporary application : a critical analysis from Islamic perspective /
Over the last decade Islamic banking has been growing rapidly as they are able to provide practical alternative products to the conventional one. Both Islamic and conventional banks issue a Letter of Guarantee (LG) to facilitate different projects that are in dire need of capitals. In fact, the co...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English |
| Published: |
Kuala Lumpur :
Institute of Islamic Banking and Finance, International Islamic University Malaysia,
2013
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| Subjects: | |
| Online Access: | Click here to view 1st 24 pages of the thesis. Members can view fulltext at the specified PCs in the library. |
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| Summary: | Over the last decade Islamic banking has been growing rapidly as they are able to provide practical alternative products to the conventional one. Both Islamic and conventional banks issue a Letter of Guarantee (LG) to facilitate different projects that are in dire need of capitals. In fact, the conventional banks issue LG based on interest unlike Islamic Banks. However, some Islamic banks do charge fee for LG based on kafālah mechanism which may be regarded as a back door to riba. The main purpose of this research is to provide critical analysis on the legality of charging fees for LG from Islamic perspective and to furnish viable alternatives to kafālah principle. This study sets about the conceptual framework of kafalah (guarantee) and its historical background briefly. Moreover, the concept of LG in conventional bank is analyzed and its practical manifestation in the Islamic bank is critically evaluated. In addition, the research suggests the model of guarantee products in Islamic banking that represent mushārakah, muḍārabah and wakālah as replicates of the kafālah model by taking cognizance of the views expressed by scholars of the past and the present regarding fee for such products in general and to LG in particular. Furthermore, it highlights the obstacles in the application of alternative models and explores the feasible solution to overcome these obstacles as well. |
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| Physical Description: | xi, 72 leaves : illustrations ; 30cm. |
| Bibliography: | Includes bibliographical references (leaves 68-72). |