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The study aims to consider wa’dan-based products in Islamic banks in Malaysia and discuss the validity of wa’dan in those products from the perspective of Shari’ah.

Case studies were conducted of three Islamic banks in Malaysia. Semi-structured interviews were carried out with bankers as well as Shari’ah scholars. The document analysis method was adopted to strengthen the findings.

The study shows that three Islamic banking products: Musyarakah Mutanaqisah (MM) home and property financing; Al-Ijarah Thumma Al-Bai’ (AITAB) vehicle financing; and Ijarah rental swap (IRS) use wa’dan in their product structures. After discussing the different views of the scholars, the study concludes that wa’dan should be allowed in the above-mentioned products because it is different from muwa’adah. In wa’dan, every single wa’d is separate from each other, as every one of them is related to different types of events. With regard to the issue of Shari’ah in MM home and property financing, it was concluded that wa’d from the customer to purchase the bank’s share is not a capital guarantee. Moreover, IRS is not a form of gambling but is in line with Maqasid al-Shari’ah.

The study is limited to three Islamic banks in Malaysia that focus on retail and commercial banking products. Therefore, the study excludes application of wa’dan in sukuk and some other Islamic derivatives that are not the practice of these three banks.

This empirical study adds new knowledge by developing the concept and practice of wa’dan. Wa’dan as an innovative tool for product development to overcome Shari’ah issues in conventional banking may be of interest to practitioners all around the world.

The objective of the chapter is to discuss the role of wa’d (promise) to mitigate risk in different Islamic banking products. The chapter will illustrate the element of wa’d in different Islamic banking products in Malaysia.

The study has adopted the document review method to get information on different banking products. Moreover, it conducted semi-structured interviews with bankers to get in-depth information.

The study finds out that wa’d plays a vital role in structuring several products including retail products, trade financing products, and treasury products. Along with the unilateral wa’d there is a usage of double wa’d (wa’dan) in some product structures. In most of the products, wa’d is included as a risk mitigation instrument along with other major underlying Shari’ah contracts. Some Shari’ah issues are involved with these products namely the Shari’ah rulings related to wa’dan, “form over substance,” etc.

This is an in-depth field study which adds new knowledge on wa’d-based products. The experience of Malaysia might be a lesson for other countries to minimize risk in their Islamic banking products.

The purpose of this paper is to theoretically assess the legal position of the Islamic doctrine of wa'd (or pledge) in relation to 'aqd (within the sphere of Islamic finance), and compare it with the conventional viewpoint, while discussing the several modes/means/usages in terms of applied Shariah.

The paper utilizes a doctrinal approach to focus on the theoretical aspect of the concept while attempting to suggest practical adaptation and structuring, enabling smoother and more efficient use. The status quo was dependent on the wa'd being an operational instrument in today's world and further development in terms of bridging the understanding was the approach.

Before invoking the legal validity of wa'd in a court, it is important to view the practice of wa'd to be a dominant ideology utilized in Islamic finance. The first advocate who called for the practice of the binding promise in commutative financial contracts was probably Sheikh Mustafa Al‐Zarqa who adopted the position that if it was admissible, for the unilateral promise (wa'd) to be binding in donations, then, in his view, it was even more justifiable for the wa'd to be binding in commutative contracts. According to the preponderant opinion among Maliki scholars, a unilateral promise is as binding as a contract if the reason was mentioned in it or the contract was initiated based on the promise, a view shared by scholars such as Imam Bukhari. The other point of view, according to contemporary jurists such as Al‐Syntiqi and Dr Muhamed Sulaiman opine that a unilateral promise would not create any liability upon the promisor and it also does not confer any right to the promisee, although from religion point of view, it is recommended to fulfill it.

Fully understanding the modus operandi of a wa'd in key as today, wa'd has established itself within the domain of several transactions under Islamic banking and finance, such as replicating conventional short selling, structuring FOREX markets option and even operating in a double wa'd structure.

The paper would prove useful and informative on the theoratical aspect of the concept especially to students starting out in Islamic finance. For those already well versed or immersed in the field, the paper would certainly provide ideas and exploratory suggestions into the development of the concept in terms of enhancement.

Purpose – This research study aims to answer the question of how good is the development of the extended regency, and which shows better autonomy of development—before or after expanding. The implications of this study is to answer whether expanding a regent is truly needed to improve the economic development and welfare of the remote regions and their people. This study analyzes the autonomous state of three regencies, North Aceh, Bireuen and Lhokseumawe districts, which have expanded. The analysis takes into consideration the difference in the proportion of their regional revenues, budgeting perfomance, and economic growth as indicators of regional autonomy.

Design/Method/Approach – The data used in this research are secondary data sourced from the budget realization report and the accountability report of North Aceh, Bireuen, and Lhokseumawe districts from 2006 to 2013. The data analysis methods used in this study are the analysis of financial ratios and the comparative mean of one way anova.

Finding – The results showed a significant value or a probability value more than 0.05. Thus, the hypothesis (H1) is rejected, and therefore the hypothesis (H0) is received.

Research Impication – The implication is that there is no difference in the average of regional autonomy of North Aceh Regency, Bireuen, and Lhokseumawe districts as seen from the proportion of local revenue, budgeting perfomance, and regional growth. It means that with regard to financial performance there is no difference in the level of independence in autonomy among the three regions. The proportion of local revenue, financial permormance area, and the development of North Aceh, Bireuen, and Lhokseumawe districts demonstrate no influence on the level of independence in autonomy.

The purpose of this study is to investigate shari’ah scholars’ views and experiences pertaining the shari’ah issues, challenges and prospects in Islamic derivatives. Specifically, this paper critically examines the criticisms toward conventional derivative instruments and the controversies surrounding underlying contracts and current Islamic derivative products.

This study uses qualitative methods to form a deeper understanding of shari’ah scholars’ perception and experience on Islamic derivatives. Semi-structured interviews were conducted with five shari’ah scholars who are currently working in Islamic financial institutions in Malaysia and Singapore. This study used phenomenological techniques for its data analysis.

This study has found that shari’ah scholars are aware of the shari’ah issues surrounding Islamic derivatives and have provided comprehensive insight on the solution to these issues. It was found that it is important to take into account the derivatives instruments in Islamic financial industry because of the need for hedging and risk mitigation within Islamic financial institutions. Nonetheless, the study has also found that the use of wa’ad contracts to structure Islamic profit rate swaps and foreign currency exchanges are problematic because of it having features of bay’ al-kali’ bil-kali (the sale of one debt for another).

This study is one of few studies that highlight the shari’ah issues of Islamic derivatives in Islamic banking and finance industry. This paper is of value in discussing risk management and Islamic derivatives in Islamic financial institutions and how there are many issues under the investigation process, particularly issues related to controversial underlying contracts and products.

This study aims to investigate the possibility of practicing cross-subsidisation of underwriting surplus among different takaful operators. It responds to the recent discussion paper published by Bank Negara Malaysia (BNM) on broader application of tàawun (mutual assistance), which seeks insights into cross-tàawun of underwriting surplus within takaful industry.

A qualitative, semi-structured interview is used to gather primary data, featuring 13 one-to-one interviews with selected Sharìah and operational experts in takaful. Open-ended questions are drafted according to BNM’s discussion paper to guide the interview. A content analysis method is used to delve into the topic based on scholarly papers, books and regulatory guidelines. A thematic analysis is applied to explore the qualitative data.

This study establishes the feasibility of cross-subsidisation of underwriting surplus in takaful. Given that participants are the rightful owners of the underwriting surplus, cross-tàawun is deemed permissible with participants’ consent. With the view that underwriting surplus belongs to the fund due to outright transfer of contributions by participants, the regulators have discretion to permit cross-tàawun. The authorities can make any decision if it serves the public interest. Furthermore, the study provides Sharìah and regulatory requirements to govern the practice of cross-tàawun in takaful. Respondents of the study advocate for policy reviews and regulatory adjustments to facilitate cross-subsidisation of takaful surplus.

This study significantly contributes to the existing body of knowledge in Islamic insurance studies. It offers valuable insights for the regulators to formulate the required policies and guides takaful operators to develop products accordingly. Moreover, the study supports Sharìah scholars in making informed decisions about cross-tàawun practices.

This study fills a critical gap in the existing literature by being the first to examine cross-subsidisation of underwriting surplus in takaful. The proposed cross-subsidisation of underwriting surplus will enhance sustainability of takaful funds and contribute to stability of takaful industry. As a foundation, this study encourages future research to explore other relevant aspects of cross-subsidisation of underwriting surplus in takaful operation.

This study aims to explain the Sukuk structures individually by highlighting the key differences and commonalities in their influential aspects. It also compares the core aspects of Sukuk literature with conventional bonds and suggests the point of differences between them.

This study uses a quali-quantitative approach with the help of segmented bibliometric analysis to describe core differences and commonalities in various Sukuk structures in terms of core authors, countries, sources, affiliation, documents and keywords. In addition, it deploys “biblioshiny” from R-package “bibliometrix 3.0” to identify key influential aspects of different Sukuk instruments.

Results reported that Malaysia is the core contributing country in Sukuk publications and the center of author correspondence. There is a structural difference among various Sukuk instruments. The significant literature commonalities in Ijarah, Mudarabah, Musharakah and Murabahah Sukuk affiliations and globally cited journal articles are also found. However, the influential aspects of Sukuk compared with conventional bonds are different from other Sukuk literature. It also conducted a keyword analysis to report significant themes in the literature.

This study contributes to the existing body of knowledge as it helps investors to understand the shariah permissibility and investment supremacy of various Sukuk alternatives. Investors, policymakers, scholars and researchers should understand the dynamics of multiple Sukuk structures and their Shari’ah permissibility. This study significantly elaborates on this objective.

This study aims to analyse the Shariah issues in the implementation of tawarruq contract in the Islamic profit rate swap (IPRS) instrument in Malaysia.

This is a qualitative study in applying data analysis and semi-structured interview approaches. Data was collected from various documents including journals, articles and past studies conducted by scholars. To achieve the purpose of this study, the data is analysed based on thematic analysis.

The study found several Shariah issues regarding the implementation of tawarruq contract in the IPRS instruments, which have remained a dispute amongst the Islamic financial scholars such as its profit-making purpose, encouragement of debt, impediment of shared risk concept, disputed underlying assets, a deception towards allowing riba and dual agency.

This study recommends several improvements such as the establishment of a neutral agency that does not represent any banking institution to manage the tawarruq contract commodity purchase from Bursa Suq al-Sila’ (BSAS). In addition, a neutral agency can provide aid in terms of transaction facility or at least consultation service for clients to enable them to conduct the commodity transactions independently.

Moreover, guidelines should be established on the separation of the deadline to sign the agreement of appointment of a bank as the commodity purchase agent and the agreement of appointment of the bank as the commodity sale agent on behalf of clients. All transactions related to tawarruq contract commodity must be done through BSAS. The regulators and industry experts may create a guideline for the IPRS based on the issues and recommendations that have been discussed in this study.

On the basis of the analysis of the criticisms and issues in the implementation of tawarruq contract in the IPRS instrument, the current study found that an intermediating institution is allowed to gain profits from transactions conducted so long as they are based on Shariah principles of contract in Islam. As there is no parameter specifically for IPRS, thus the suggested parameter can be used by policymakers such as the Central Bank of Malaysia to ensure the industry complies with Shariah principles.