The world is currently experiencing the most unprecedented health crisis. As of June 2020, the Corona disease has infected more than 8 million people and caused 465,000 deaths worldwide. The world economy is also impacted by the Corona virus pandemic known as COVID-19. Malaysian government estimates that the economic losses since the enforcement of national lockdown amounts to RM63 billion. Subsequently, a huge stimulus package worth RM250 billion was distributed to sustain the domestic markets. In addition, individuals and businesses were offered moratorium which gives six months deferment of installment to cope with financial challenges during this difficult time. The implementation of moratorium however raises a polemic within the Islamic banking industry locally. Customers question the justification used by Islamic banks in imposing additional charges after the expiry of moratorium period. The criticism to certain extend has labelled Islamic banks similar with their conventional counterparts for prioritizing profit over social responsibility. Thus, the article analyzes the moratorium issue based on the framework of Shariah objectives (maqasid). The analysis will not only shed light on the current moratorium polemic but also provides a comprehensive view for the broader issue pertaining to the dichotomy between the theory and practice of Islamic banking industry.

Bay al-tawarruq is increasingly adopted by Malaysian Islamic financial institutions (IFIs) in creating both deposit and financing products. The contract involves sequences of trading between three parties namely client, IFIs and brokers. However, in order to simply the operation and to minimize client’s involvement, the actual trading are conducted between IFI and brokers only. IFI will act on behalf of the client and execute all trading transactions. The practice triggers fiqh issue because the IFI (as agent of client) will sell and purchase commodity to himself. The present article discusses the issue by assessing Muslim jurists’ view pertaining to dual agency practices. The article adopts juristic analysis method in which classical and contemporary scholars arguments are analysed before a preferred opinion (tarjih) is concluded. Understanding the issue is vital to avoid misunderstanding about the legality of Islamic financial products particularly products that used the organized bay’ al-tawarruq as the underlying contract.

As one of the equity-based contracts in the Islamic commercial law, mudarabah has been viewed as the ideal basis for an interest-free banking operation. This article studies mudarabah theory as described by the great Muslim jurists. It examines the legal rulings of the four main madhahib namely the Hanafis, Malikis, Shafi'is and Hanbalis, and their relation to the financia1 practice of the mudarabah during the medieval period. The focus of discussion will be the scope of empowerment given by the investor to the agent-manager. It is found that the jurists differed in determining the restrictions to be placed upon the agent-manager in managing the capital entrusted to him. From a modern perspective, the Hanafis appeared to be the most flexible in comparison with the other three madhahib. In conclusion, the article will be a valuable addition to our understanding of mudarabah and perhaps, this will help us to develop a better equity-based financing instrument in the contemporary period.

The main objective of this paper is to discuss the ways and challenges in harmonizing shari'ah rulings in Islamic finance industry. The issue of harmonization is pertinent to be resolved because of disagreements over certain shari'ah issues to certain extent has hindered industry's robust growth in the global market. This paper critically reviews previous efforts and proposes a new harmonization framework at national and international levels. Apart from that, it also identifies the main challenges in harmonizing shari'ah rulings. The challenges identified are the absence of inclusive participation in issuing shari'ah standards, lack of regulatory support, discrepancy level of industry development between countries, differences of shari'ah governance framework and difficulty to win over all shari'ah scholars collectively. This paper will be valuable addition to the existing literature in the effort towards enhancing the governance of shari'ah matters in Islamic finance industry.

Islamic classical contracts have been revitalized in creating various financial products in Islamic banking institutions. However, their application in the current banking industry is not without argument. It is viewed that the classical contracts are not practiced as propounded in the classical fiqh doctrines. The article discusses the issue by proposing a different methodological approach for Shariah advisors in guiding Islamic banks. Shariah advisors in Islamic banking institutions are encouraged to unbind themselves from nominated Islamic classical contracts (uqud al-musamma). They need to unveil new contracts that suit with modern practices and authentically able to solve problems and limitations faced by Islamic banks. Based on examination of twelve main classical texts of the four Sunni schools, it is found that Islamic classical commercial contracts evolved over times especially in the Hanafis, Shafie is and Hanbalis schools. Past Muslim scholars expanded the classical contracts in response to new challenges and problems encountered by Muslim community in their commercial dealings. The evolution of Islamic commercial contracts can be further enhanced by adhering to the principles of transparency, honesty, mutual consent and humanitarian goals.

Small and Medium-Sized enterprises (SMEs) play an important supportive role in &e Malaysian economy. This research examines their perception towards the Islamic banking products offered by Islamic banking institutions. A total of 180 SMEs from the Federal Teritory of Kuala Lumpur, Selangor and Negeri Sembilan had been surveyed based on self-administered questionnaire. The results indicate that majority of the SMEs still do not consider the Islamic banks as the most desirable financia1 institution. The less effective marketing strategy has been identified as one of the reasons contributing to the low acceptance of products offered. The research concludes with some recommendations to be adopted in enhancing the effectiveness of lslamic banks marketing strategy.

This paper investigates the development of Shafi'is rules on mudarabah from the second until the sixth century Hijri. The investigation is carried out based on the analysis of itab al-Umm of al-Shafi'i (d.204), al-Muhadhdhab of al-Shirazi (d.472), al-Wajiz of al-Ghazali (d.505) and al-Minhaj of al-Nawawi (d.676). It is found that the mudarabah rules were in preliminary stage during the time of al-Shafi'i and had been developed gradually in the later centuries. As evident in the text of al-Shirazi, the rules most probably finalised during the fourth century. The findings confirm the majority of Western scholars opinion in which argue that the institution of madhhab did not emerged during the lifetime of the eponyms but sometimes after their death.