IMPLEMENTATION OF COLLATERAL HIBAH IN MALAYSIA

Abstract

Collateral hibah is among the hibah products that was created as an instrument for Islamic wealth management. The problem of Muslims unclaimed property can be mitigated by implementing collateral hibah. This study examined several of current concerns regarding the implementation of collateral hibah in Malaysia by reviewing studies of the literature that previous researchers had written on the subject. This is pertinent since hibah is increasingly being employed by Muslims in Malaysia as a primary Islamic wealth management technique and todays community owns most intangible assets, including homes, land, and other properties, through loan financing from financial institutions. This concept paper attempted to analyse the problems from several perspectives as presented by earlier researchers. The results of the literature analysis indicated that a number of problems, including legality of collateral hibah both national and Islamic law, various rulings from Syariah courts regarding the validation of collateral hibah, conflict of jurisdiction between Shariah and civil court, lack of unified legislation regarding hibah procedure and many more, needed to be resolved to improve the collateral hibahs current implementation in Malaysia. Therefore, this concept paper addressed the problem of Islamic wealth management as it relates to collateral hibah and may serve as an outline for further research.