Bba Compared Mmo
African Diary of Organization Management Volume. 6(1), pp. 266-273, eleven January, 2012 Available online for http://www.academicjournals.org/AJBM DOI: 10. 5897/AJBM11. 2042 ISSN 1993-8233 В©2012 Academic Journals
Full Span Research Conventional paper
Islamic property financing: Comparability between Bai' Bithamin Ajil (BBA) and Musharakah Mutanaqisah (MM) Nooraslinda Abdul Aris1, Rohana Othman1*, Rafidah Mohd Azli2, Roshayani Arshad1, Mardiyyah Sahri2 and Abdul Razak Yaakub3 one particular
Accounting Exploration Institute and Faculty of Accountancy, Universiti Teknologi MARA, Shah Alam, Malaysia. 2 Middle for Islamic Thought and Understanding (CITU), Universiti Teknologi MARA, Shah Alam, Malaysia. 3 Islamic Banking and Finance Institute, Malaysia. Recognized 8 Nov 2011
Bai' Bithaman Ajil (BBA) house financing strategy was introduced in Malaysia by Bank Islam Malaysia Berhad (BIMB) upon their establishment in 1984. The item is a substitute for the conventional housing loan provided by most regular banks as it is said to be Shari'ah compliant and free from the elements of riba', gharar and maisir. Since its introduction, a large number of views, research and responses have been made on the notion of the product which is claimed being unacceptable by simply other Muslim countries. As a substitute product to the conventional housing loan, the BBA house financing must be enhanced and stand for par to remain competitive. Over the years, controversial circumstances on BBA house loans have come about and are raising in numbers. This posed problems for the consumers, financiers and also the regulators. To conquer this, Musharakah Mutanaqisah (MM) house auto financing concept was introduced by the Islamic finance institutions (IFI). This paper aims to identify equally Islamic concept of house funding and provides insight of the advantages and disadvantages. Key words: Islamic house auto financing, shari'ah compliance, Bai' Bithaman Ajil (BBA), Musharakah Mutanaqisah (MM). INTRODUCTION Islamic financial rests on the overall idea of increasing tenets of Islamic religious belief to economic activity in a way that improves social wellbeing. Islamic agreements are normally grounded on asset-based and it ought to be comply with the Shari'ah, which usually prohibits components of riba (usury), gharar (uncertainty), maisir (gambling) and nonhalal activities. This sort of prohibitions will be clearly described in the Qur'an and Hadiths and has to be strictly adhered to the financial institutions. Islamic financial comprising economical transactions in banks and non-bank financial institutions is said to be depending on the concept of a social purchase of brotherhood and solidarity (Imady and Siebel, 2006). The participants in Islamic financing ventures are considered because business lovers who collectively bear the hazards and profits. Hesse and Sole (2008) opiniated that Islamic financing has forever established on its own within the monetary crisis landscape. The permissibility of risky capital investment without explicit curiosity earning provides merge three basic varieties of Islamic loans namely artificial loans which is debt-based through sales and repurchase arrangement; lease contract which is based upon assets through sales and leaseback agreement (operating lease) or thirdparty acquired resources with buy obligation (finance lease); and profit writing contracts which can be equity primarily based for long term assets. The Shari'ah makes up the foundation intended for the practice of Islamic finance through the observance of its tenets, conditions and principles. Complete compliance with Shari'ah principles would take confidence for the general public and the financial market segments on the trustworthiness of Islamic finance functions. The Shari'ah is the Islamic
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Aris et al.
rules of human being conduct which will governs business matters. Due to the probation of certain factors in the ventures, Islamic banks have to develop financial products which usually confirm to...
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