TY - JOUR AU - Hasan, Aznan AU - Haron, Muhamad Nasir AU - Mohamed, Mohd Faysal AU - Mana, Budeeman PY - 2018/03/29 Y2 - 2024/03/29 TI - CLASSIFICATION OF DEFAULTERS IN THE PAYMENT OF DEBT IN ISLAMIC BANKING PRACTICES JF - Al-Shajarah: Journal of the International Institute of Islamic Thought and Civilization (ISTAC) JA - SHAJARAH VL - 0 IS - 0 SE - ARTICLES DO - 10.31436/shajarah.v0i0.610 UR - https://journals.iium.edu.my/shajarah/index.php/shaj/article/view/610 SP - 85-103 AB - <p>This paper discusses the issue of treatment of debt defaulters from<br>SharÊ‘ah perspective and its current practices in Islamic banking and<br>finance. In doing so, the paper first explains the concept of debt and<br>its payment obligation from Islamic point of view. The paper also<br>critically reviews the current practice of treating defaulters by<br>Islamic banks. A thorough analysis on various opinions and views of<br>the classical and contemporary jurists in determining the types of<br>defaulters is also provided. The paper concludes that besides the<br>categorization of defaulters to solvent and insolvent in the modern<br>Islamic banking practice, a new category namely, muta‘atthir (a<br>solvent debtor who is facing temporary shortage of liquidity) should<br>also be considered. These debtors are not insolvent based on the<br>ratio of their total assets to debts. However, they are in situation of<br>default due to temporary shortage of liquidity that they are facing.<br>Hence, this new category might have its own ruling from Sharī‘ah<br>point of view in terms of debt settlement and restructuring where it<br>does not carry the ruling of insolvent debtor.</p> ER -