Mahyuddin Khalid emkay@salam.uitm.edu.

my

ISLAMIC BANKING AND FINANCE OTHER SERVICES

CONTENTS
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AGENCY ( AL-WAKALAH) GUARANTEE (AL-KAFALAH) COMMISSION (JUALAH) FEE (AL-UJR) REMITTANCE (AL-HIWALAH)

AGENCY BASED ON AL-WAKALAH

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Definition of Wakalah:

The appointment of someone to take over the appointers affairs on his/her behalf for the purpose of accomplishment of certain tasks

Wakalah implies a kind of delegation by a person of his business to act on his behalf. It is lawful if a person appoints another as his representative for selling or buying, letting or hiring, giving or taking a pledge for depositing or receiving a gift, for safe keeping, for making a compromise, and for giving an acquaintance and for making an admission etc.

AGENCY BASED ON AL-WAKALAH

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Pillars Of Wakalah

Wakil - The authorized agent, representative, proxy, trustee Muwakkil - Authorizer, mandatory, client, principal Muwakkal Bih - Things or subject matter that is being entrusted for, or the business deals involved Sighah - Ijab (Offer) and Qabul (Acceptance)

Types of Wakalah

Wakalah Mutlaqah (Unlimited Agency/ Unrestricted Wakalah)

A Wakalah contract that is not restricted to any conditions except for those that are permitted in Islam Not confined to certain circumstances or time limit.

Wakalah Muqayyadah (Limited Agency/ Restricted Wakalah)

An Wakalah contract that is restricted or confined with certain conditions that are legitimized by Islam Bounded by special circumstances or time limit

AGENCY BASED ON AL-WAKALAH

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Ijab (Offer)

Muwakkil. (Authorizer, mandatory, client, principal)

Muwakkal Bih (Things or subject matter)

Wakil (authorized agent, representative, proxy)

Qabul (Acceptance)

GUARANTEE BASED ON ALKAFALAH

Definition of al-Kafalah:
The

pledge given by the guarantor/surety (alkafil) to a creditor (al-makful lah) on behalf of the principal debtor (al-makful anh) to secure that the guaranteed (al-makful bih) i.e the debtor, will be present at a definite place, e.g to pay his debt, or fine, or, in the case of retaliation, to undergo punishment.

In kafalah a person joins another person in undertaking certain obligation. Consequently, both persons become jointly liable to meet any claim that may arise from this obligation

GUARANTEE BASED ON ALKAFALAH

Pillars Of al-Kafalah

Guarantor/surety (al-kafil) - A person who gives the guarantee is also called surety. A person who agrees to be responsible for another persons liability especially paying for his debt Creditor (al-makful lah) - A creditor to whom the guarantee is given Principal debtor (al-makful anh) - The person in respect of whose default the guarantee is given. He is also called the principal debtor. Guaranteed (al-makful bih) i.e the debtor, things - The claim itself whether it relates to the person or property. Al-Kafalah bi al-Nafs (Guarantee of Person)

Types Of al-Kafalah

The guarantor is assuming the responsibility to make sure the presence of the principal in a lawsuit. This is also possible in cases where the principal owes the creditor. Can be both for the settlement of a debt (dain) or a guarantee that a certain specific thing (ain) would be returned. For instance, the guarantor is liable to make sure that a certain property bought by the buyer will be returned to him. The creditor has the option of demanding repayment from either the principal or the guarantor.

Al-Kafalah Bi al-Mal (Guarantee of Property)

FLOWS OF AL-KAFALAH
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Kafil (Gurantor)

Creditor can retrieve his debt in case of default by the principle debtor

Guarantor agrees to be responsible Principle Debtors liability

Makful Bih (Debtor/ Things)

Makful Anh (Principle Debtor)

Makful Lah (Creditor)

COMMISSION BASED ON JUALAH

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Definition of Jualah:

Declaration(akad) for a commitment or a promise for a person to pay some fee to another person for the task that have been done.

Jualah must be clearly stated in term of the task that need to be done, the time of the task, and also the object of Jualah is not prohibited in Shariah. The commission for Jualah must be given only after the task have been done. Pillars of Jualah:

Jail (a person that promise to give the commission for the achievement of the task ) Majullah (a person that perform the task). Jualah (fee) Sighah (Ijab (offer) and Qabul (acceptance))

FEE BASED ON AL-UJR

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Ujr can be defined as compensation or It refers to a contract of proposed and known usufruct with a specified and lawful return or compensation for the effort or work which has been expended. Refers to commissions or fees charged for service. Pillars of al-Ujr:
Al-Ajir (The recipient of the payment Employee, hired worker etc.) Mustajir (A person who gives something for hire Employer etc.) Al-Amal (Service) Ujrah (Payment of service) Sighah (Offer (Ijab) and Acceptance (Qabul))

FEE BASED ON AL-UJR

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2. Finance the students

STUDENT

1. Student apply for PTPTN 3. Payback the money + AlUjr

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REMITTANCE BASED ON ALHIWALAH

Definition of al-Hiwalah:
To

transfer a debt from one person (debtor) to another with the same price, it comes to the consequence than the liability of the debtor is abolished. In other words, the first obligator is freed from any financial obligations.

Hiwalah is a contract which caused the transfer of debt from one party to another. According to Mughni Muhtaj, the term Hiwalah is refer to the debt transfer from a party/person to another.

PILLARS OF AL-HIWALAH
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Pillars of al-Hiwalah

Muhil - A person who is transfers his debt to another person. Muhal-Lah - A creditor, whom his property/ debt is transferred to be paid by another person instead of his debtor. Muhal Alaihi - Tranferee a person who accept a hiwalah to himself Muhal Bih - The things which is transferred by Hiwalah Sighah - Ijab (Offer) and Qabul (Acceptance) Hiwalah Muqayyadah (Restricted hiwalah )

Categories of al-Hiwalah

The transferee to pay from property of the transferor, owed to him by the transferee, or in the hand of the transferee This type of hiwalah when a transfer is made with reference to the debt on the transferee. The majority only recognizes this type of hiwalah. A hiwalah which is not restricted for payment to be made from property of the transferor in the hands of the transferee This is a type of hawalah where the contract is concluded without reference to the debt on the transferee and he accepts the transfer. The majority argues that the contract is a kafalah and not hiwalah.

Hiwalah Mutlaqah (Absolute hiwalah)

FLOWS OF AL-HIWALAH
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Debtor will make offer (ijab) to transfer his debt to the transferee and transferee will accept (qabul) the hiwalah process

Muhal Alaihi (Transferee)

Transferee will have to pay the debt to the creditor

Muhal Bih (Debt/ Things which is transfered)

Muhil (Transferor/ Debtor)

Muhal Lah (Creditor)

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END OF CHAPTER