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Thursday, 2 February 2017

Resolution: Hibah in Loan (Qardh) (Central Bank of Malaysia)

Qardh is one of the contracts being applied to manage liquidity in Islamic finance. The contract obliges a borrower to return the loan amount to the lender, without contracting to pay any additional return.
However, in normal practice, when paying off the debt, a borrower sometimes gives hibah, at his own discretion. The issue is whether the practice of giving hibahcomplies with the Shari’ah.

Resolution
The Council, in its 55th meeting, held on 29th December 2005 / 27th Zulkaedah 1426, resolved that the practice of giving unconditional hibah in a loan contract is permissible.
Nevertheless, the Council advised that such practice should be
implemented wisely, so as to avoid it becoming a norm (`urf), which can make it a condition attached to the loan contract.


Issuer:
Shariah Advisory Council, Central Bank of Malaysia

Year:
2005
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com
Pelaburan Unit Amanah Islam: www.unit-amanah-islam.net

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