Maslahah Approach Towards Imposition of Ta’widh in Islamic Banking

Abstract

The permissible imposition of ta’widh on the delay repayment against financing in Islamic banking is based on the ijitihad made by Shariah advisor of bank as a maslahah. The concept of maslahah and mafsadah are always used as a guide by Muslim Scholars to resolve contemporary Muslim problems. For this research, the instrument used to obtain the data is through library method and field research. The data was then analyzed using inductive and deductive method to see whether or not maslahah approach towar ds this issue is in line with its concept and objective. Generally, results showed that the late payment charges imposed by Islamic banking have conformed to the real maslahah concept by celebrating both parties, banks and customers, based on some aspects investigated such as the law imposition of ta’widh itself, the basis and the rate of ta’widh imposition, as well as ta’widh clauses in contracts. Thus, this research has found out that the Islamic banking institutions in Malaysia need to improve on the implementation of ta’widh as one of the ways to prevent customers from the lapse of repaying to the bank.