An Empirical Study on the Practices of Inah and Ujrah Concept in Islamic Banking Credit Card (Case Study in Malaysia)

Abstract

The demand for Islamic banking in Malaysia is increasing as well as Islamic product. For instance, the demand for Islamic credit card (known as credit card-i) is rapidly growth as an alternative to replace the current conventional credit card. However, the current practice of Islamic concept has been criticized as such the controversial concept of Inah. However, Inah is continuous practising in Islamic banking product such as Islamic credit card even it is prohibited by majority of scholars (Maliki’s, Hanbali’s and Hanafi’s but allowed by Shafie). It is widely used as an alternative to the interest-based of conventional credit card. Currently, a few Islamic banks in Malaysia came up with other option and offered concept of Ujrah as a substitute to concept of Inah. This paper will analyze the application of ‘Inah and Ujrah in implementing the Islamic credit card and its comparison. Thus, this paper will review an opinion from some Shariah scholars regarding these concepts as it is allowable.