The objective of this paper is to explore the practical application of ta’widh and gharamah in Islamic banking in Malaysia with reference to the guidelines that are applicable to date; and find out the issues detected in the implementation of them. In the course of doing this, Shariah reasons for imposing ta’widh and gharamah in Islamic banking are discussed. Also, whether ta’widh and gharamah would be required for Islamic banking with reference to possible alternatives to them is also discussed. This qualitative study primarily focuses on library research and adopts case study approach for analyzing the application of ta’widh and gharamah. The jurisdiction of the study is Malaysia because the central bank of the country has made policies on the matter. The paper draws on observations made by Shariah scholars about the policies on the subject matter. This study gives an insight into the history and issues related to ta’widh and gharamah which are often kept tacit. It is recommended that future studies should look into the effectiveness of these two approaches to serve as a deterrent factor and contribute to the declining rate of non-performing financing in Islamic banks.

Asset-Backed Securitization (ABS) was introduced in Malaysia in 2001. This timely study overviews the structure of ABS in the Malaysian capital market, examines the securitization mechanism, and measures the growth and performance over the period from 2001 to 2005. The results reveal a robust growth in overall, with a significant increase of 200?'0 in 2003. Furthermore, Islamic ABS was introduced in 2003, and their issuance size in 2005 was worth RM5.2 billion, thus surpassing the Conventional ABS with an issuance value of RM4.2 billion. We also consider company performance, specifically on the originator perspective, and focus on the cormmercial property sector. The results reveal that after securitizing their assets, the originators manage a reduction in debt obligations and an enhancement in earning capacities. The study concludes with the benefits that a transfer of knowledge on ABS can bring to organizational performance and to investors' portfolios. The authors believe that ABS shall become a premier alternative debt financing for companies and a portfolio diversification tool to investors in the Malaysian capital market.