Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing

Musharakah mutanaqisah (diminishing partnership) house financing (MMHF) is one type of house financing facilities that Islamic bank in Malaysia offers. It is a hybrid house financing product involving three recognized Shariah contracts that are musharakah (partnership), ijarah (leasing) and bay‘ (sa...

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Main Authors:	Othman, Ahmad Azam, Hassan, Rusni, Omar, Muhammad Naim, Mokhtar, Norlizah
Format:	Conference or Workshop Item
Language:	English
Published:	2014
Subjects:	HG Finance
Online Access:	http://irep.iium.edu.my/38559/ http://irep.iium.edu.my/38559/2/IBMC_2014_ABSTRACT_SCHEDULE_AND_CERT.pdf

id	iium-38559
recordtype	eprints
spelling	iium-385592014-10-03T07:40:48Z http://irep.iium.edu.my/38559/ Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing Othman, Ahmad Azam Hassan, Rusni Omar, Muhammad Naim Mokhtar, Norlizah HG Finance Musharakah mutanaqisah (diminishing partnership) house financing (MMHF) is one type of house financing facilities that Islamic bank in Malaysia offers. It is a hybrid house financing product involving three recognized Shariah contracts that are musharakah (partnership), ijarah (leasing) and bay‘ (sale). Its modus operandi starts with the bank and the customer jointly purchase a particular house with an agreed ratio of contribution such as 90:10. The customer then leases the bank’s portion and at the same time purchases the bank’s portion progressively through monthly payment that consists of the monthly rental payment and purchase price. This results the bank’s ownership becomes diminished and the whole ownership of the house belongs to the customer at the end of the financing period. The issue is what happens when the customer defaults his monthly payment to the bank. Thus, this paper aims to investigate the remedies available to the bank upon default of the monthly payment by the customer. This is done by analyzing the MMHF agreement entered into between the bank and the customer. The findings from the analysis show that there are various available remedies to the bank due to default of monthly payment by the customer. The remedies include outstanding arrears payment, remaining acquisition payment, purchase of bank’s shares, purchase of customer’s shares and collateral right enforcement through sale. 2014 Conference or Workshop Item PeerReviewed application/pdf en http://irep.iium.edu.my/38559/2/IBMC_2014_ABSTRACT_SCHEDULE_AND_CERT.pdf Othman, Ahmad Azam and Hassan, Rusni and Omar, Muhammad Naim and Mokhtar, Norlizah (2014) Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing. In: Islamic Business Management Conference (IBMC 2014), 18-19 August 2014, Putra World Trade Centre.
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG Finance
spellingShingle	HG Finance Othman, Ahmad Azam Hassan, Rusni Omar, Muhammad Naim Mokhtar, Norlizah Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing
description	Musharakah mutanaqisah (diminishing partnership) house financing (MMHF) is one type of house financing facilities that Islamic bank in Malaysia offers. It is a hybrid house financing product involving three recognized Shariah contracts that are musharakah (partnership), ijarah (leasing) and bay‘ (sale). Its modus operandi starts with the bank and the customer jointly purchase a particular house with an agreed ratio of contribution such as 90:10. The customer then leases the bank’s portion and at the same time purchases the bank’s portion progressively through monthly payment that consists of the monthly rental payment and purchase price. This results the bank’s ownership becomes diminished and the whole ownership of the house belongs to the customer at the end of the financing period. The issue is what happens when the customer defaults his monthly payment to the bank. Thus, this paper aims to investigate the remedies available to the bank upon default of the monthly payment by the customer. This is done by analyzing the MMHF agreement entered into between the bank and the customer. The findings from the analysis show that there are various available remedies to the bank due to default of monthly payment by the customer. The remedies include outstanding arrears payment, remaining acquisition payment, purchase of bank’s shares, purchase of customer’s shares and collateral right enforcement through sale.
format	Conference or Workshop Item
author	Othman, Ahmad Azam Hassan, Rusni Omar, Muhammad Naim Mokhtar, Norlizah
author_facet	Othman, Ahmad Azam Hassan, Rusni Omar, Muhammad Naim Mokhtar, Norlizah
author_sort	Othman, Ahmad Azam
title	Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing
title_short	Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing
title_full	Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing
title_fullStr	Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing
title_full_unstemmed	Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing
title_sort	remedies available to malaysian islamic banks upon default of monthly payment by the customer in musharakah mutanaqisah (diminishing partnership) house financing
publishDate	2014
url	http://irep.iium.edu.my/38559/ http://irep.iium.edu.my/38559/2/IBMC_2014_ABSTRACT_SCHEDULE_AND_CERT.pdf
first_indexed	2023-09-18T20:55:24Z
last_indexed	2023-09-18T20:55:24Z
_version_	1777410270243586048

Remedies available to Malaysian Islamic banks upon default of monthly payment by the customer in Musharakah Mutanaqisah (diminishing partnership) house financing

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