Wednesday, June 22, 2016

2859) NO ELEMENT OF CRUELTY IN ISLAMIC FINANCE, SAYS AIBIM - MALAYMAIL ONLINE - 21/6/16

PPIM Chief Activist Datuk Nadzim Johan had said that the housing loans offered by Islamic financial institutions are more cruel than conventional housing loans as customers of the former stand a higher risk of bankruptcy. — Picture by Saw Siow Feng.
PPIM Chief Activist Datuk Nadzim Johan had said that the housing loans offered by Islamic financial institutions are more cruel than conventional housing loans as customers of the former stand a higher risk of bankruptcy.

KUALA LUMPUR, June 21 — The Association of Islamic Banking Institutions Malaysia (Aibim) has dismissed claims by the Malaysian Muslim Consumers’ Association (PPIM) that customers of Islamic finance are at higher risk of bankruptcy compared to customers of conventional finance, saying there is no element of cruelty in Islamic finance.

In a statement today, Aibim said PPIM’s allegations did not take into consideration the various initiatives taken by the former to address the problems faced by customers of Islamic finance.

Recently, PPIM Chief Activist Datuk Nadzim Johan urged Bank Negara Malaysia (BNM) and the National Fatwa Council to review the Islamic housing system offered by banking institutions to the public.

Nadzin had said in a statement that the housing loans offered by Islamic financial institutions are more cruel than conventional housing loans as customers of the former stand a higher risk of bankruptcy. 

Aibim said anyone wishing to make a comment should at first ensure the veracity of their comment so as not to jeopardise the efforts to develop the Islamic financial system.

It said in a Bai’ Bithaman Ajil (BBA) contract, a sale and purchase transaction for the financing of an asset on a deferred payment basis with a pre-agreed payment period, the Islamic financial institution (IFI) is required to give a rebate (ibra’) to a customer who has taken out a loan for a house in a  project that is later abandoned.

After taking the ibra’ into account, the amount to be paid by the customer of Islamic finance will be equivalent to that of a conventional financing customer, it said.

Aibim said it has implemented various resolution mechanisms over the last few years, such as restructuring, rescheduling, refinancing and discounts, and, in certain cases, cancelling a loan repayment in part or in full. 

Aibim also urged customers affected by abandoned housing projects to contact the complaints unit of the relevant IFI.

“Customers are also advised not to use the services of a third party in line with the requirement for secrecy under the Islamic Financial Services Act 2013,” it said, adding they could also get advice from BNM’s customer service Laman Informasi Nasihat dan Khidmat (LINK).





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