FACTORS INFLUENCING HIYAL APPROACH IN ISLAMIC BANKING INDUSTRY MALAYSIA

Authors

  • Faiqah Mohd Sokris
  • Ab Rahim Ibrahim
  • Sazelin Arif

Abstract

Malaysia plays a pivotal role in the global Islamic finance industry, particularly in Islamic banking. Despite its success, Islamic banking faces challenges, especially in developing products that meet both Shariah principles and market demands. The hiyal (legal stratagem) approach has been employed to bridge this gap, although its usage has raised concerns about Shariah compliance, particularly accusations of facilitating riba (interest). This study explores the factors influencing the adoption of hiyal in Islamic banking product development in Malaysia. A qualitative methodology was employed, using semi-structured interviews with eight practitioners, including Shariah executives and Shariah committee members from various Islamic banks. The study revealed that the use of hiyal is driven by the need to meet regulatory, Shariah, and market demands. However, practitioners acknowledge that its application can lead to ethical concerns, potentially undermining customer trust. The findings highlight the importance of transparent Shariah governance and regulatory oversight in maintaining consumer confidence in Islamic banking products.

 

Keywords: hiyal; legal stratagem; Shariah compliance; product development; Islamic banking

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Published

2024-06-16

How to Cite

Faiqah Mohd Sokris, Ab Rahim Ibrahim, & Sazelin Arif. (2024). FACTORS INFLUENCING HIYAL APPROACH IN ISLAMIC BANKING INDUSTRY MALAYSIA. Journal of Human Capital Development (JHCD), 17(1), 88–104. Retrieved from https://jhcd.utem.edu.my/jhcd/article/view/6467

Issue

Vol. 17 No. 1 (2024)

Section

ARTICLES

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