A framework for determination of actual costs in Islamic financing products

Islamic banking commonly considered as an alternative to the conventional banking system, conducts its business based on certain financial contracts in order to attain profit, while doing away with the element of interest (riba). Among the services offered by Islamic financial institutions (IFI) are...

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Main Authors:	Mohd Noor, Azman, Haron, Muhamad Nasir
Format:	Article
Language:	English
Published:	IIUM Press 2016
Subjects:	HG Finance
Online Access:	http://irep.iium.edu.my/53385/ http://irep.iium.edu.my/53385/ http://irep.iium.edu.my/53385/1/53385_A%20framework%20for%20determination%20of%20actual%20costs%20in%20Islamic%20financing%20products.pdf

id	iium-53385
recordtype	eprints
spelling	iium-533852016-12-06T06:47:35Z http://irep.iium.edu.my/53385/ A framework for determination of actual costs in Islamic financing products Mohd Noor, Azman Haron, Muhamad Nasir HG Finance Islamic banking commonly considered as an alternative to the conventional banking system, conducts its business based on certain financial contracts in order to attain profit, while doing away with the element of interest (riba). Among the services offered by Islamic financial institutions (IFI) are financing products and fee-based services to generate profits free from interests and other non-permissible incomes. The fee-based services conducted by Islamic banks may raise some Shari’ah issues such as the practice of charging a fee on services related to loan (qard) facility. Similarly, in financing activities, the IFI also imposes some amount of compensation or related charges in the case of late payment or default events for such financing. This paper aims to discuss the mechanism to determine the calculation of such actual charges and fees from Shari’ah perspective. Nevertheless, this paper does not intend to discuss the issue of “pricing” for Islamic financial products to determine its sales price and profit margin. This paper proposes Shari’ah compliance parameters on the computation of the actual costs for some related financing products offered by Islamic financial institutions. IIUM Press 2016 Article PeerReviewed application/pdf en http://irep.iium.edu.my/53385/1/53385_A%20framework%20for%20determination%20of%20actual%20costs%20in%20Islamic%20financing%20products.pdf Mohd Noor, Azman and Haron, Muhamad Nasir (2016) A framework for determination of actual costs in Islamic financing products. Journal of Islamic Finance, 5 (2). pp. 37-52. ISSN 2289-2109 E-ISSN 2289-2117 http://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/126
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 Mohd Noor, Azman Haron, Muhamad Nasir A framework for determination of actual costs in Islamic financing products
description	Islamic banking commonly considered as an alternative to the conventional banking system, conducts its business based on certain financial contracts in order to attain profit, while doing away with the element of interest (riba). Among the services offered by Islamic financial institutions (IFI) are financing products and fee-based services to generate profits free from interests and other non-permissible incomes. The fee-based services conducted by Islamic banks may raise some Shari’ah issues such as the practice of charging a fee on services related to loan (qard) facility. Similarly, in financing activities, the IFI also imposes some amount of compensation or related charges in the case of late payment or default events for such financing. This paper aims to discuss the mechanism to determine the calculation of such actual charges and fees from Shari’ah perspective. Nevertheless, this paper does not intend to discuss the issue of “pricing” for Islamic financial products to determine its sales price and profit margin. This paper proposes Shari’ah compliance parameters on the computation of the actual costs for some related financing products offered by Islamic financial institutions.
format	Article
author	Mohd Noor, Azman Haron, Muhamad Nasir
author_facet	Mohd Noor, Azman Haron, Muhamad Nasir
author_sort	Mohd Noor, Azman
title	A framework for determination of actual costs in Islamic financing products
title_short	A framework for determination of actual costs in Islamic financing products
title_full	A framework for determination of actual costs in Islamic financing products
title_fullStr	A framework for determination of actual costs in Islamic financing products
title_full_unstemmed	A framework for determination of actual costs in Islamic financing products
title_sort	framework for determination of actual costs in islamic financing products
publisher	IIUM Press
publishDate	2016
url	http://irep.iium.edu.my/53385/ http://irep.iium.edu.my/53385/ http://irep.iium.edu.my/53385/1/53385_A%20framework%20for%20determination%20of%20actual%20costs%20in%20Islamic%20financing%20products.pdf
first_indexed	2023-09-18T21:15:32Z
last_indexed	2023-09-18T21:15:32Z
_version_	1777411537177149440

A framework for determination of actual costs in Islamic financing products

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