A Modification of Bai Bithaman Ajil Instrument through Musharakah Mutanaqisah: Fixation of Robust Optimisation into Rule 78

Abd Aziz Arrashid Abd Rajak; Nurfadhlina Abdul Halim

Authors

Abd Aziz Arrashid Abd Rajak
Nurfadhlina Abdul Halim

bai bithaman ajil, musharakah mutanaqisah, profit sharing ratio, rule 78, robust optimisation

Abstract

The development of Islamic financial system in Malaysia had lead to various innovation and establishment of new instruments and concepts whether in debt-based financing or equity-based financing. Though several concepts have been modified to fulfill consumer's need, however, each and every one of the models should abide the law of Shariah. For over a few decades, Malaysia has been the lead country in applying the Bai Bithaman Ajil instrument in property financing. Until recently, a few legal cases have emerged and its compliancy towards Shariah has been debated among the scholars and consumers itself. In spite of the expose issues, a new proxy has been introduced. Musharakah Mutanaqisah is introduced as an equity-financing and is proven to be conforming towards Shariah as its ownership is shared between the bank and consumer. In contemplation of making the debt-based financing compliance towards Shariah, this journal is to schemed a new model in which the original model of Bai Bithaman Ajil is embedded with profit sharing ratio exist in Musharakah Mutanaqisah.

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How to Cite

A Modification of Bai Bithaman Ajil Instrument through Musharakah Mutanaqisah: Fixation of Robust Optimisation into Rule 78. (2014). Global Journal of Science Frontier Research, 14(46), 17-26. https://journalofscience.org/index.php/GJSFR/article/view/

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Author Biographies

Abd Aziz Arrashid Abd Rajak

Abd Aziz Arrashid Abd Rajak is a researcher at Universiti Malaysia Terengganu, Malaysia. His research interests include robust optimization in Islamic finance, as evidenced by his work on modifying Bai Bithaman Ajil instrument through Musharakah Mutanaqisah, and spectral analysis of voice, as seen in his study on periodicity spectral and electroglottographic analyses of pressed voice. He has published 3 works, accumulating 4 citations, with an h-index of 1 and an i10-index of 0.

Nurfadhlina Abdul Halim

Nurfadhlina Abdul Halim is a dedicated researcher affiliated with Universiti Malaysia Terengganu, where she contributes to the fields of applied mathematics and Islamic finance. Her work focuses on the development and modification of Islamic financial instruments, including the Bai Bithaman Ajil and Musharakah Mutanaqisah models, with an emphasis on robust optimization techniques. She has also validated mathematical models for profit sharing ratio determination in Islamic hire-purchase contracts. With 81 published works, 146 citations, an h-index of 6, and an i10-index of 4, her research has made a notable impact. She is indexed in major academic databases such as Scopus and OpenAlex, and holds an ORCID identifier, reflecting her active engagement in the scholarly community.

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