Bursa Suq Al Sila Framework Analysis

Abstract

In Malaysia, Tawarruq was introduced in Islamic financial system to replace the bai ai-inah concept. Hence, Tawarruq is the most popular product in Islamic Banking and finance sector. The ideas of Tawarruq came from the classical perspectives of jurists that want to assist the development of Islamic economic, banking and finance and replacing the old concept which is clearly prohibited in Islam. Therefore, to overcome this issues and facilitate the implementation of Tawarruq, Suq al-Sila’ (BSAS) was introduce in Islamic financial system. However, many scholars has discussed from a difference views about the implementation of Tawarruq and BSAS. This study refer to BSAS as a case study to complete this research. The objectives of this study is to understand the framework of BSAS, explain the types of commodities and specification of commodity authorizing by Bursa Malaysia Islamic Services (BMIS), participants in the BSAS platform and analyze issues that exist on the BSAS platform. Meanwhile, this research use the secondary data such as collect data from the sources from library and data from internet and primary data by interviewing Vice President, Bank Shariah Officer and Shariah Officer Hong Leong Islamic Bank to obtain primary data. This paper will explain in more detail the BSAS transaction flow and present the Shariah issues involved. The results of this study found that there are several aspects of the implementation of the BSAS platform that raise some Shariah issues. Therefore, this paper is expected to improve BSAS platform and Tawarruq principles.