Rectification of Uqud Al-Fasidah (Void Contracts) in Islamic Financial Institutions
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
AAOIFI. 2008. Shariah Standards for Islamic Financial Institutions. Manama: Accounting Auditing Organization Islamic Financial Institution (AAOIFI).
AAOIFI. 2010b. Shariah Standards for Islamic Financial Institutions. Manama: Accounting Auditing Organization Islamic Financial Institution (AAOIFI).
Al-Buhuti. (n.d). Sharh Muntaha al-Iradat. Beirut: Dar al-Fikr.
Al-Dasuqi. (1980b). Hashiyah al-Dasuqi ‘ala Sharh al-Kabir. Beirut: Dar Ihya’al-Kutub al-‘Arabiyyah.
Ali, M. M. 2017. “Shariah Non-Compliant Events in Islamic Banks in The Practice of Tawarruq Financing in Malaysia”, PhD Thesis, Universiti Sains Islam Malaysia.
Al-Kasani, Abu Bakar ibn Mas’ud. 1986. Bada’i al-Sana’i fi Tartib al-Shara’i’. Beirut: Dar al-Kutub Al-Ilmiyyah
Al-Nawawi, Abu Zakariyya Mahyudin bin Sharaf, 1991. Rauḍatu al-Ṭālibiin wa ‘Ūmdatu al-Muftīn, Beirut: Al-Maktab al-Islami.
Al-Qaradaghi, Muhiuddin. 2009. Al-Fadhalah Wa Tatbeeqatuha.
Al-Ramli, Muhammad bin Ahmad. (1938). Ghayat al-Bayan. Beirut: Dar al-Ma’rifat.
Al-Sharbini, Muhammad Khatib. (n.d). Al-’Iqnā’ fi Halli Alfāẓi Abi Shujā’. Beirut: Dar al-Fikr, n.d.
Al-Zuhaily. 2006. Al-Qawaid Al-Fiqhiyyah wa tatbiqatuha fi al-Madzahib al-arba’ah. Dimashq. Dar al-Fikr
Bank Negara Malaysia. 2010. Shari’ah Governance Framework for Islamic Financial Institutions, Kuala Lumpur. BNM
Dusuki, A. W, Ali. M. A. & Hussein, L. 2013. “Hanafi Approach to Deal with Shari’ah Non-Compliance Transactions in Islamic Finance”, Australian Journal of Basic and Applied Science. 7 (6): 589-595. 2013 ISSn 1991-8178
Ibn Abidin, Muhammad Amin bin Umar. 1992. Radd al-Muhtar ala al-Durr al-Mukhtar. Beirut: Dar al-Fikr
Ibn Humam, Muhammad bin Abdul Wahid. 2003. Fathu al-Qadir fi Sharh al-Hidayah, Beirut: Dar al-Fikr
Ibn Qudāmah‘Abd Allah ibn Ahmad, n.d. Al-Mughnī. Cairo: Maktabah al-Qāhirah Ibn Qudamah.
Islamic Financial Services Board. 2005. The Guiding Principles of Risk. available online: www.ifsb.org
Copyright (c) 2020 Journal of Fatwa Management and Research
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.