Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia

This paper analyzes the practice of Islamic Banks in Malaysia in home financing. While conventional banks deal with interest in financing home, car or other appliances, the Islamic banks limit to transactions that are free from interest, usury, ambiguity, cheating etc. Islamic Banks in Malaysia impl...

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Main Authors:	Osmani, Noor Mohammad, Abdullah, Md. Faruk
Format:	Article
Language:	English
Published:	World Business Institute 2010
Subjects:	HG Finance
Online Access:	http://irep.iium.edu.my/2443/ http://irep.iium.edu.my/2443/ http://irep.iium.edu.my/2443/1/Musharakah_Mutanaqisah.pdf

id	iium-2443
recordtype	eprints
spelling	iium-24432011-11-23T03:06:09Z http://irep.iium.edu.my/2443/ Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia Osmani, Noor Mohammad Abdullah, Md. Faruk HG Finance This paper analyzes the practice of Islamic Banks in Malaysia in home financing. While conventional banks deal with interest in financing home, car or other appliances, the Islamic banks limit to transactions that are free from interest, usury, ambiguity, cheating etc. Islamic Banks in Malaysia implement certain well-known systems in home financing. The most popular ones are Bay` bi Thaman ‘Aajil (BBA), which is sale on a deferred payment; and Musharakah Mutanaqisah (MM), which means, diminishing partnership. The paper would deal specifically on this MM home financing as it is implemented in Malaysian Islamic banking systems, while drawing a clear line of distinctions between well-known BBA and less practiced MM. It would survey the existing literatures on Islamic Banks in Malaysia and also their practices to reach conclusions on such transactions. Many Islamic banks today accept MM home financing as an alternative to BBA or Murabaha sale, which was in existence since the inception of Islamic Banks in Malaysia. The paper would look into MM from Jurisprudential point of view to see if it could be adopted as it is practiced today, or needs some modifications. It will highlight the characteristics of MM and related issues like ownership and liabilities, shares and ownership transfer, Ijarah and rentals etc. The paper expects to draw certain principles governing the implementation of MM in Islamic home financing to keep it free from interest and making it vibrant and relevant to the financial markets. World Business Institute 2010-07 Article PeerReviewed application/pdf en http://irep.iium.edu.my/2443/1/Musharakah_Mutanaqisah.pdf Osmani, Noor Mohammad and Abdullah, Md. Faruk (2010) Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia. International Review of Business Research Papers, 6 (2). pp. 272-282. ISSN 1832-9543 (O), 1837-5685 (P) http://www.bizresearchpapers.com/21.%20Osmani.pdf
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG Finance
spellingShingle	HG Finance Osmani, Noor Mohammad Abdullah, Md. Faruk Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia
description	This paper analyzes the practice of Islamic Banks in Malaysia in home financing. While conventional banks deal with interest in financing home, car or other appliances, the Islamic banks limit to transactions that are free from interest, usury, ambiguity, cheating etc. Islamic Banks in Malaysia implement certain well-known systems in home financing. The most popular ones are Bay` bi Thaman ‘Aajil (BBA), which is sale on a deferred payment; and Musharakah Mutanaqisah (MM), which means, diminishing partnership. The paper would deal specifically on this MM home financing as it is implemented in Malaysian Islamic banking systems, while drawing a clear line of distinctions between well-known BBA and less practiced MM. It would survey the existing literatures on Islamic Banks in Malaysia and also their practices to reach conclusions on such transactions. Many Islamic banks today accept MM home financing as an alternative to BBA or Murabaha sale, which was in existence since the inception of Islamic Banks in Malaysia. The paper would look into MM from Jurisprudential point of view to see if it could be adopted as it is practiced today, or needs some modifications. It will highlight the characteristics of MM and related issues like ownership and liabilities, shares and ownership transfer, Ijarah and rentals etc. The paper expects to draw certain principles governing the implementation of MM in Islamic home financing to keep it free from interest and making it vibrant and relevant to the financial markets.
format	Article
author	Osmani, Noor Mohammad Abdullah, Md. Faruk
author_facet	Osmani, Noor Mohammad Abdullah, Md. Faruk
author_sort	Osmani, Noor Mohammad
title	Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia
title_short	Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia
title_full	Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia
title_fullStr	Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia
title_full_unstemmed	Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia
title_sort	musharakah mutanaqisah home financing: a review of literatures and practices of islamic banks in malaysia
publisher	World Business Institute
publishDate	2010
url	http://irep.iium.edu.my/2443/ http://irep.iium.edu.my/2443/ http://irep.iium.edu.my/2443/1/Musharakah_Mutanaqisah.pdf
first_indexed	2023-09-18T20:10:02Z
last_indexed	2023-09-18T20:10:02Z
_version_	1777407416114085888

Musharakah Mutanaqisah home financing: a review of literatures and practices of Islamic banks in Malaysia

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