Classification of defaulters in the payment of debt in Islamic banking practices

This paper discusses the issue of treatment of debt defaulters from SharÊ'ah perspective and its current practices in Islamic banking and finance. In doing so, the paper first explains the concept of debt and its payment obligation from Islamic point of view. The paper also critically reviews t...

Full description

Saved in:
Bibliographic Details
Main Authors: Hasan, Aznan, Haron, Muhamad Nasir, Mohamed, Mohd Faysal, Mana, Budeeman
Format: Article
Language:English
English
Published: IIUM Press, International Islamic University Malaysia 2017
Subjects:
Online Access:http://irep.iium.edu.my/63102/1/63102_Classification%20of%20defaulters%20in%20the%20payment_scopus.pdf
http://irep.iium.edu.my/63102/7/63102_Classification%20of%20defaulters%20in%20the%20payment.pdf
http://irep.iium.edu.my/63102/
http://journals.iium.edu.my/shajarah/index.php/shaj/article/view/610
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.iium.irep.63102
record_format dspace
spelling my.iium.irep.631022018-04-18T07:02:37Z http://irep.iium.edu.my/63102/ Classification of defaulters in the payment of debt in Islamic banking practices Hasan, Aznan Haron, Muhamad Nasir Mohamed, Mohd Faysal Mana, Budeeman HG Finance HG3368 Islamic Banking and Finance HJ8003 Public credit. Debts. Loans. Claims This paper discusses the issue of treatment of debt defaulters from SharÊ'ah perspective and its current practices in Islamic banking and finance. In doing so, the paper first explains the concept of debt and its payment obligation from Islamic point of view. The paper also critically reviews the current practice of treating defaulters by Islamic banks. A thorough analysis on various opinions and views of the classical and contemporary jurists in determining the types of defaulters is also provided. The paper concludes that besides the categorization of defaulters to solvent and insolvent in the modern Islamic banking practice, a new category namely, muta'atthir (a solvent debtor who is facing temporary shortage of liquidity) should also be considered. These debtors are not insolvent based on the ratio of their total assets to debts. However, they are in situation of default due to temporary shortage of liquidity that they are facing. Hence, this new category might have its own ruling from Shari'ah point of view in terms of debt settlement and restructuring where it does not carry the ruling of insolvent debtor. IIUM Press, International Islamic University Malaysia 2017 Article REM application/pdf en http://irep.iium.edu.my/63102/1/63102_Classification%20of%20defaulters%20in%20the%20payment_scopus.pdf application/pdf en http://irep.iium.edu.my/63102/7/63102_Classification%20of%20defaulters%20in%20the%20payment.pdf Hasan, Aznan and Haron, Muhamad Nasir and Mohamed, Mohd Faysal and Mana, Budeeman (2017) Classification of defaulters in the payment of debt in Islamic banking practices. Al-Shajarah, 2017 (Special Issue: Islamic Banking and Finance). pp. 85-103. ISSN 1394-6870 http://journals.iium.edu.my/shajarah/index.php/shaj/article/view/610
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
English
topic HG Finance
HG3368 Islamic Banking and Finance
HJ8003 Public credit. Debts. Loans. Claims
spellingShingle HG Finance
HG3368 Islamic Banking and Finance
HJ8003 Public credit. Debts. Loans. Claims
Hasan, Aznan
Haron, Muhamad Nasir
Mohamed, Mohd Faysal
Mana, Budeeman
Classification of defaulters in the payment of debt in Islamic banking practices
description This paper discusses the issue of treatment of debt defaulters from SharÊ'ah perspective and its current practices in Islamic banking and finance. In doing so, the paper first explains the concept of debt and its payment obligation from Islamic point of view. The paper also critically reviews the current practice of treating defaulters by Islamic banks. A thorough analysis on various opinions and views of the classical and contemporary jurists in determining the types of defaulters is also provided. The paper concludes that besides the categorization of defaulters to solvent and insolvent in the modern Islamic banking practice, a new category namely, muta'atthir (a solvent debtor who is facing temporary shortage of liquidity) should also be considered. These debtors are not insolvent based on the ratio of their total assets to debts. However, they are in situation of default due to temporary shortage of liquidity that they are facing. Hence, this new category might have its own ruling from Shari'ah point of view in terms of debt settlement and restructuring where it does not carry the ruling of insolvent debtor.
format Article
author Hasan, Aznan
Haron, Muhamad Nasir
Mohamed, Mohd Faysal
Mana, Budeeman
author_facet Hasan, Aznan
Haron, Muhamad Nasir
Mohamed, Mohd Faysal
Mana, Budeeman
author_sort Hasan, Aznan
title Classification of defaulters in the payment of debt in Islamic banking practices
title_short Classification of defaulters in the payment of debt in Islamic banking practices
title_full Classification of defaulters in the payment of debt in Islamic banking practices
title_fullStr Classification of defaulters in the payment of debt in Islamic banking practices
title_full_unstemmed Classification of defaulters in the payment of debt in Islamic banking practices
title_sort classification of defaulters in the payment of debt in islamic banking practices
publisher IIUM Press, International Islamic University Malaysia
publishDate 2017
url http://irep.iium.edu.my/63102/1/63102_Classification%20of%20defaulters%20in%20the%20payment_scopus.pdf
http://irep.iium.edu.my/63102/7/63102_Classification%20of%20defaulters%20in%20the%20payment.pdf
http://irep.iium.edu.my/63102/
http://journals.iium.edu.my/shajarah/index.php/shaj/article/view/610
_version_ 1643616307708428288
score 13.18916