TAWARRUQ-BASED CREDIT CARD FROM MALAYSIA PERSPECTIVE: AN UNCENCORED ANECDOTE
DOI:
https://doi.org/10.55197/qjssh.v7i3.886Keywords:
Islamic credit card, Tawarruq, underlying contract, Islamic banking, MalaysiaAbstract
Islamic Credit Card (ICC) has performed superbly well year on year (YOY) in Malaysian market amid a meagre increment. Despite the overwhelming demand by the customers for the riba-free card, it is not without issues and difficulties. The conundrum of the underlying contract particularly tawarruq has precipitated a degree of setbacks which goes incompatible with the Islamic principles. This complication has caused the underlying contract to be in a quandary through which the ICC may succumb to the shariah non-compliance (SNC) issues and thus triggering unfavourable consequences. This study adopted a qualitative research design, employing a case study approach analysed through content analysis of policy documents, issuers’ fine prints, scholarly articles, and books to gain a comprehensive understanding of tawarruq as the underlying contract. The tawarruq based ICC appears to be at odds with the shariah principles by which it necessitates an intervention by the regulator for the restructuring mechanism. Notwithstanding, this study has limitations concerning endorsement and approval from the regulator, shariah committees and shariah advisors for the comprehensive enunciation on the tawarruq application for the ICC. As such, for future studies, it is highly advisable to obtain direct interpretation of the tawarruq arrangement for the ICC from the experts with the aim of understanding the real framework of the ICC underlying contract.
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