A Revisit to the Practice of Late Payment Charges by Islamic Banks in Malaysia
Penilaian Semula Amalan Caj Kelewatan Pembayaran oleh Perbankan Islam di Malaysia

Accounting Research Institute (ARI)/
Academy of Contemporary Islamic Studies (ACIS)
Universiti Teknologi MARA
40450 Shah Alam, Selangor, MALAYSIA.

ezani123@yahoo.com

Accounting Research Institute/
Academy of Contemporary Islamic Studies
Universiti Teknologi MARA
40450 Shah Alam, Selangor, MALAYSIA.

mazamadil@iais.org.my

Academy of Contemporary Islamic Studies
Universiti Teknologi MARA
40450 Shah Alam, Selangor, MALAYSIA.

fursansoleh@gmail.com

Academy of Contemporary Islamic Studies
Universiti Teknologi MARA
40450 Shah Alam, Selangor, MALAYSIA.

mdani393@salam.uitm.edu.my

Academy of Islamic Studies
Universiti Malaya
50630 Kuala Lumpur, MALAYSIA.

msolahuddin@gmail.com

Academy of Contemporary Islamic Studies
Universiti Teknologi MARA
40450 Shah Alam, Selangor, MALAYSIA.

emkay@salam.uitm.edu.my

Abstract

Islamic banking in Malaysia have been experiencing late payment and default issues because customers are not allowed to be charged with interest (riba) as opposed to the practices in the conventional banking. To mitigate these issues, the Shariah Advisory Council of Bank Negara Malaysia has enforced ta’widh and gharamah as regulatory alternatives. Practically, ta’widh and gharamah were imposed on the defaulting customers who fail to meet their obligation to pay their financing based on several conditions. Given the significance of its imposition, this paper aims to analyse the current practice in Islamic banks and examine the views of contemporary Muslim scholars on ta’widh and gharamah and its suitability as alternatives for avoidance of riba.

Keywords

actual loss; defaulting customers; gharamah (penalty charges); Islamic banking; Muslim scholars’ view; Ta’widh (compensation)

Citation

Yaakub, E., Mohamed Adil, M. A., Husin, A., Muhamad, M. D., Shahruddin, M. S., & Khalid, M. M. (2014). A Revisit to the Practice of Late Payment Charges by Islamic Banks in Malaysia. Jurnal Pengurusan, 42, 185–190.

@article{yaakub2014revisit,
  title={A Revisit to the Practice of Late Payment Charges by Islamic Banks in Malaysia},
  author={Yaakub, Ezani and Mohamed Adil, Mohamed Azam and Husin, Asmak and Muhamad, Mohd Dani and Shahruddin, Mohd Solahuddin and Khalid, Mohammad Mahyuddin},
  journal={Jurnal Pengurusan},
 

volume={42},
  number={},
  pages={185—190},
  year={2014},
  doi={},
  publisher={Penerbit UKM},
}

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42 (2014) 185 – 190

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