Alternative profit rate shariah-compliant for islamic banking
Profit is the aims for Islamic banking and conventional banking. Determination of profit in Islamic banking in Malaysia depends on the profit rate, whereas profit rate is essentially from reference rate which is known as the base rate (BR). However, the determination of the components contained i...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
2017
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| Subjects: | |
| Online Access: | http://eprints.unisza.edu.my/5331/1/FH02-FESP-17-10305.pdf http://eprints.unisza.edu.my/5331/ |
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| Summary: | Profit is the aims for Islamic banking and conventional banking. Determination of
profit in Islamic banking in Malaysia depends on the profit rate, whereas profit rate is essentially
from reference rate which is known as the base rate (BR). However, the determination of the
components contained in the BR such as benchmark cost of funds and the statutory reserve
requirement (SRR) is non-compliance with the Shariah because its directly proportional to the
overnight policy rate (OPR). Therefore, an alternative formula for the profit rate are proposed
which is known as the base profit rate (BPR). Construction of BPR formula is based on the
principle that are more Shariah-compliant. |
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