The Application of Sequencing (Tartib) to Determine the Validity of Personal Financing Tawarruq Contracts: A Study in Selected Islamic Financial Institutions in Malaysia

The Islamic financing contracts have witnessed rapid development in the Islamic financial sector in Malaysia. The application of sequencing (tartib) is crucial for bank managers, financiers, and investors to verify the validity of Islamic financing contracts. Therefore, this study aims to explore the issue of sequencing in Tawarruq contracts and its impact on Islamic financial institutions. It also aims to analyze the extent of commitment of selected Islamic banks to sequencing in Tawarruq contracts, and then propose a logical methodology to address the sequencing issue in the process of Tawarruq contracts in Islamic financial institutions. This study adopted a qualitative research method, utilizing both primary and secondary data documented through content analysis methodology. It also relied on personal interviews with some employees of the Islamic bank who willingly participated to obtain realistic information from the banks. The study concluded that the application of sequencing in Tawarruq contracts in Islamic financing is crucial as it ensures the validity of these contracts. In order to effectively implement roles and responsibilities, especially in Tawarruq
contracts due to their widespread use, players and regulators are encouraged to enhance the local Islamic finance system to become a better platform in the future.