Rectification of Uqud Al-Fasidah (Void Contracts) in Islamic Financial Institutions

  • Amir Husin Mohd Nor Prof. , USIM
  • Amir Shaharuddin Prof. Madya, USIM
  • Mohamad Zaharuddin Zakaria Prof. Madya, USIM
  • Ahmad Zaki Salleh Dr, USIM
  • Mualimin Mohammad Sahid Dr, USIM
  • Hussein 'Azeemi Abdullah Thaidi Dr, USIM
  • Muhamad Firdaus Ab Rahman Dr, USIM
  • Muhammad Ridhwan Ab. Aziz Prof. Madya, USIM
  • Mohd Afiq Ab. Jalil RA, USIM
Keywords: Shariah scholars, ijtihad, Islamic finance innovations

Abstract

Shariah compliance is the most critical element in the operations of Islamic financial institutions. In order to ensure the Shariah compliance, some samples of IFIs’ products are reviewed and audited. The audit practices has led to growing findings which reveal cases of uqud al-fasidah (void contracts) in IFIs. Thus, the articles discusses the issue by recommending several actions for IFIs in dealing with void contracts. The article highlights seven common causes of void contract related with bay’ al-tawarruq transaction. Some of the void instances can be rectifiable and some are non-rectifiable. As Shariah Non-Compliance (SNC) is treated seroiusly by IFIs and the regulators, the dicussion will provide insights on how to reduce the SNC incidences and to minimse their financial impatcs to relevant parties

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Published
2020-03-30
How to Cite
Mohd Nor, A. H., Shaharuddin, A., Zakaria, M. Z., Salleh, A. Z., Mohammad Sahid, M., Abdullah Thaidi, H. ’Azeemi, Ab Rahman, M. F., Ab. Aziz, M. R., & Ab. Jalil, M. A. (2020). Rectification of Uqud Al-Fasidah (Void Contracts) in Islamic Financial Institutions. Journal of Fatwa Management and Research, 20(1), 53-63. https://doi.org/10.33102/jfatwa.vol20no1.4
Section
Articles