Hibah of Collateral Property in Islamic Perspective and the Implementation in Malaysia

Abstract

The Islamic wealth planning industry is progressing with the offerings of various conceptual hibah products. Collateral hibah or securitized hibah asset has been one of hibah products in the market involving intangible asset such as real estate. However, the implementation of collateral hibah raises questions of its compliance as the property is held by the financial institution in the form of a collateral. Furthermore, there are diverse decisions of the Syariah High Court judges in substantiating the compliance of collateral hibah. Hence, this article aims to examine the views of the relevant fuqahas on the subject of collateral hibah and to analyze the tendency of judges in adopting the views of these fuqahas in their ruling on collateral hibah. Data of this study is obtained from a comparative study of the relevant sects (mazhab) and collateral hibah cases rulings in the Syariah High Court. The findings show that there are views of the relevant sects that allow collateral hibah on the condition of obtaining consent from the collateral holder and this view has been adopted by the judges. Knowing the views of these fuqahas (that allow the concept of collateral hibah) and realising the inclination of the judge's decision on this issue, thus supports the industry offering the product to be implemented according to the Islamic shariah perspective that agrees to the court’s decision.