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(KUALA LUMPUR) Malaysian Syariah lender RHB Islamic Bank Bhd will no longer use a contract rejected as un-Islamic by Middle Eastern scholars, in a bid to adopt globally accepted Syariah standards, a newspaper said yesterday.
RHB Islamic, the Syariah banking arm of Malaysia's fourth-largest lender RHB, has dropped the use of the bai bithaman ajil structure, the Malaysian Reserve said, quoting RHB Islamic's head of Syariah division Ahmad Suhaimi Yahya.
'RHB Islamic has taken a stance of phasing out products and services based on BBA (bai bithaman ajil) or bai al-ina with effect from Oct 1,' Mr Suhaimi was quoted as saying. 'This is based on (its) Syariah committee's advice to adopt globally accepted Syariah principles.'
The bai bithaman ajil contract is where a bank buys an asset for its customer and sells it to him at a profit, with the sum to be repaid in instalments.
The newspaper said that RHB Islamic would use the musharaka mutanaqisah contract instead, which is where a partner gives the right to his equity partner to acquire the invested asset through a one-time payment or periodical instalments. -- Reuters
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