IJARAH
Evaluation on Al-Ijarah Thumma Al-Bay’ (AITAB) Facility:
The Case of Affin Islamic Bank Berhad
Aisyah Abdul Rahman, PhD. eychah@ukm.my Rahazilah Binti Rahman
School of Business, Faculty of Economy and Management,
Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia.
Abstract
Al-Ijarah Thumma Al-Bay‟ (AITAB) is the contemporary innovative product that specifically designed for Islamic hire-purchase facility with compliance of Shariah principle.
Even though AITAB facility was established more than ten years ago in Islamic banking, there is no Islamic hire-purchase act to regulate this product. As a consequent, there is still a question of whether the operations of AITAB fully abide with Shariah principle as Albert
Einstein had stated that "In theory, theory and practice are the same. However, in practice, they are not." Therefore, the objective of this research is to identify if there are differences between the theory of AITAB facility based on Shariah principle and the real operation practiced by the Affin Islamic Bank Bhd. Also, we seek to identify the similarities (if any) between AITAB and conventional hire-purchase (based on Hire-Purchase Act 1967) in order to investigate whether the similarities in practice have been influenced by the same regulation. This study adopts the research methodology of qualitative approach and content analysis. The explanations given by the Affin Islamic bank‟s manager regarding the issues and implementation of the chosen practice answers the unsolved issues surrounding AITAB facility for a long time. Towards the end, this study suggests that new guidelines on the
Islamic Hire Purchase Act should soon be designed and implemented. Also, both government and Islamic banks should be more transparent in educating the society about the AITAB facility. Keywords: Islamic Banking; AITAB principle
1
1.0
INTRODUCTION
Nowadays, the Islamic products have increased significantly in demand year by year. The increased demand by
The Case of Affin Islamic Bank Berhad
Aisyah Abdul Rahman, PhD. eychah@ukm.my Rahazilah Binti Rahman
School of Business, Faculty of Economy and Management,
Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia.
Abstract
Al-Ijarah Thumma Al-Bay‟ (AITAB) is the contemporary innovative product that specifically designed for Islamic hire-purchase facility with compliance of Shariah principle.
Even though AITAB facility was established more than ten years ago in Islamic banking, there is no Islamic hire-purchase act to regulate this product. As a consequent, there is still a question of whether the operations of AITAB fully abide with Shariah principle as Albert
Einstein had stated that "In theory, theory and practice are the same. However, in practice, they are not." Therefore, the objective of this research is to identify if there are differences between the theory of AITAB facility based on Shariah principle and the real operation practiced by the Affin Islamic Bank Bhd. Also, we seek to identify the similarities (if any) between AITAB and conventional hire-purchase (based on Hire-Purchase Act 1967) in order to investigate whether the similarities in practice have been influenced by the same regulation. This study adopts the research methodology of qualitative approach and content analysis. The explanations given by the Affin Islamic bank‟s manager regarding the issues and implementation of the chosen practice answers the unsolved issues surrounding AITAB facility for a long time. Towards the end, this study suggests that new guidelines on the
Islamic Hire Purchase Act should soon be designed and implemented. Also, both government and Islamic banks should be more transparent in educating the society about the AITAB facility. Keywords: Islamic Banking; AITAB principle
1
1.0
INTRODUCTION
Nowadays, the Islamic products have increased significantly in demand year by year. The increased demand by
References: Abdul-Rahim Al-Saati, 2003, The Permissible Gharar (Risk) in Classical Islamic Jurisprudence, J.KAU: Islamic Econ.,16(2), 3-19 Ahamed Kameel Mydin Meera and Dzuljastri Abdul Razak. 2009, Home Financing through the Musharakah Mutanaqisah Contracts: Some Practical Issues, J.KAU: Islamic Aida Othman. 2010. Muzakarah Cendekiawan Syariah Nusantara, Hilal dan Makharij: Ke Arah Ketelusan di dalam Operasi Perbankan Islam.ISRA, Isu-Isu Perundangan dalam Muhammad Ayub. 2007. Understanding Islamic Finance. Wiley. 542. Muhammad Ayub. 2009. Understanding Islamic Finance. John Wiley & Sons. 542. Muhammad Taqi Usmani. 2010. An Introduction to Islamic Finance. Idara Impex, New Delhi, India. Muhammad Umer Chapra. 2000. The Future of Economics: An Islamic Perspective. The Islamic Foundation Nurdianawati Irwani Abdullah. 2005. Islamic Hire-Purchase in Malaysian Financial Institutions: A Comparative Analytical Study Nurdianawati Irwani Abdullah & Asyraf Wajdi Dusuki. 2006. A Critical Appraisal of AlIjarah Thumma Al-Bay‟ (AITAB) Operation: Issues and Prospects. Paper presented at 4th International Islamic Banking and Finance Conference, Monash University of Nurdianawati Irwani Abdullah & Asyraf Wajdi Dusuki. 2006. Customers‟ Perceptions of Islamic Hire-Purchase Facility in Malaysia: An Empirical Analysis Rusni Hassan, Aishath Muneeza & Adnan Yusoff. 2011. Legal Stains in the Malaysian Islamic Banking Practices of Al-Ijarah Thumma Al-Bai‟ (AITAB) Saiful Azhar Rosly. 2008.