Examining the issues of conventional and islamic trust receipt in banks

One of the conventional trade finance facilities is trust receipt. This facility is known as Murabahah Trust Receipt-i (TR-i) in Malaysian Islamic banks. The objective of this paper is to examine the nature of both conventional and Islamic trust receipt in terms of the similarities and differences....

Full description

Bibliographic Details
Main Authors:	Syed Alwi, Sharifah Faigah, Osman, Ismah, Mohammad Hatta, Mohammad Firdaus, Ibrahim, Uzaimah, Sawari, Mohd Fuad
Format:	Article
Language:	English
Published:	American Scientific Publishers 2015
Subjects:	HG1501 Banking KBP Islamic Law
Online Access:	http://irep.iium.edu.my/47072/ http://irep.iium.edu.my/47072/ http://irep.iium.edu.my/47072/ http://irep.iium.edu.my/47072/1/Islamic_Trust_Receipt-Ibima-Advanced-Science-Letters.pdf

id	iium-47072
recordtype	eprints
spelling	iium-470722017-10-31T01:24:23Z http://irep.iium.edu.my/47072/ Examining the issues of conventional and islamic trust receipt in banks Syed Alwi, Sharifah Faigah Osman, Ismah Mohammad Hatta, Mohammad Firdaus Ibrahim, Uzaimah Sawari, Mohd Fuad HG1501 Banking KBP Islamic Law One of the conventional trade finance facilities is trust receipt. This facility is known as Murabahah Trust Receipt-i (TR-i) in Malaysian Islamic banks. The objective of this paper is to examine the nature of both conventional and Islamic trust receipt in terms of the similarities and differences. The second objective is to ascertain the application of the trust receipt in Murabahah TR-i. Lastly, to determine whether, the use of letter of hypothecation both in conventional and Murabahah TR-i conforms to Shariah requirements. The qualitative method is adopted, where the information on the practices of eleven Islamic banks in Malaysia is gained through semi-structured interviews conducted with the bankers who are directly involved with Murabahah TR-i. Apparently, this paper discovered that the nature of conventional and Islamic trust receipt is totally different. Thus, it is not appropriate for Islamic banks to use the term trust receipt for their Murabahah TR-i facility. Additionally, it is found that the usage of letter of hypothecation in Murabahah TR-i facility is not required in Murabahah (mark-up) contract. Eventually, Bank Negara Malaysia’s role is very crucial in determining the appropriateness of using the trust receipt facility in Islamic banks and the letter of hypothecation in Murabahah TR-i for Islamic banks. American Scientific Publishers 2015-05-01 Article PeerReviewed application/pdf en http://irep.iium.edu.my/47072/1/Islamic_Trust_Receipt-Ibima-Advanced-Science-Letters.pdf Syed Alwi, Sharifah Faigah and Osman, Ismah and Mohammad Hatta, Mohammad Firdaus and Ibrahim, Uzaimah and Sawari, Mohd Fuad (2015) Examining the issues of conventional and islamic trust receipt in banks. Advanced Science Letters, 21 (5). pp. 1596-1599. ISSN 1936-6612 E-ISSN 1936-7317 http://www.ingentaconnect.com/content/asp/asl/2015/00000021/00000005/art00127?token=003b1483415e7b76504c48666770452a2b2f2a406a2d3b6a333f25763b8 http://dx.doi.org/10.1166/asl.2015.6112
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking KBP Islamic Law
spellingShingle	HG1501 Banking KBP Islamic Law Syed Alwi, Sharifah Faigah Osman, Ismah Mohammad Hatta, Mohammad Firdaus Ibrahim, Uzaimah Sawari, Mohd Fuad Examining the issues of conventional and islamic trust receipt in banks
description	One of the conventional trade finance facilities is trust receipt. This facility is known as Murabahah Trust Receipt-i (TR-i) in Malaysian Islamic banks. The objective of this paper is to examine the nature of both conventional and Islamic trust receipt in terms of the similarities and differences. The second objective is to ascertain the application of the trust receipt in Murabahah TR-i. Lastly, to determine whether, the use of letter of hypothecation both in conventional and Murabahah TR-i conforms to Shariah requirements. The qualitative method is adopted, where the information on the practices of eleven Islamic banks in Malaysia is gained through semi-structured interviews conducted with the bankers who are directly involved with Murabahah TR-i. Apparently, this paper discovered that the nature of conventional and Islamic trust receipt is totally different. Thus, it is not appropriate for Islamic banks to use the term trust receipt for their Murabahah TR-i facility. Additionally, it is found that the usage of letter of hypothecation in Murabahah TR-i facility is not required in Murabahah (mark-up) contract. Eventually, Bank Negara Malaysia’s role is very crucial in determining the appropriateness of using the trust receipt facility in Islamic banks and the letter of hypothecation in Murabahah TR-i for Islamic banks.
format	Article
author	Syed Alwi, Sharifah Faigah Osman, Ismah Mohammad Hatta, Mohammad Firdaus Ibrahim, Uzaimah Sawari, Mohd Fuad
author_facet	Syed Alwi, Sharifah Faigah Osman, Ismah Mohammad Hatta, Mohammad Firdaus Ibrahim, Uzaimah Sawari, Mohd Fuad
author_sort	Syed Alwi, Sharifah Faigah
title	Examining the issues of conventional and islamic trust receipt in banks
title_short	Examining the issues of conventional and islamic trust receipt in banks
title_full	Examining the issues of conventional and islamic trust receipt in banks
title_fullStr	Examining the issues of conventional and islamic trust receipt in banks
title_full_unstemmed	Examining the issues of conventional and islamic trust receipt in banks
title_sort	examining the issues of conventional and islamic trust receipt in banks
publisher	American Scientific Publishers
publishDate	2015
url	http://irep.iium.edu.my/47072/ http://irep.iium.edu.my/47072/ http://irep.iium.edu.my/47072/ http://irep.iium.edu.my/47072/1/Islamic_Trust_Receipt-Ibima-Advanced-Science-Letters.pdf
first_indexed	2023-09-18T21:06:59Z
last_indexed	2023-09-18T21:06:59Z
_version_	1777410999402364928

Examining the issues of conventional and islamic trust receipt in banks

Similar Items