Wadiah and ujrah issue in al-rahnu product: a turning point to tawarruq structure

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The issue of wadi'ah and ujrah has long been discussed by scholars in the past by dividing them into two different types of contracts, namely mu'awadat and tabarru'at. They agreed that these two contracts have different characteristics, where mu'awadat is to generate profit while tabarru'at is a purely charitable contract. Thus, this article aimed to review why this combination is a non-shari'ah compliant and therefore, a replacement with another shari'ah structure becomes an essential. This study uses qualitative approach where interviews and content analysis are conducted and several books of fiqh from the four schools of thought are examined. The frequency of words by using some identified terms such as wadi'ah, rahn, ujrah, mu'awadat and tabarru'at are determined and coded to form the tendency of fiqh views whether it support the objective or against it. The study shows that modern scholars have a tendency of shared similar views and they found these two covenants (wadi'ah and ujrah) have been mixed in the same product namely ar-rahnu and this has raised the issue of shariah. They argued the safekeeping of collateral is applied based on the principle of wadi'ah where they impose a fee for the service that is rendered. This kind of fee is charged under the principle of ujrah. However, this connection gives rise to the indirect implications of bay' wa salaf and qard jarra manfa'ah, that are prohibited in shari'ah. Therefore, the tawarruq is so much better option to replace the wadiah-ujrah principles.
Wadiah and ujrah , Al-rahnu , Tawarruq
Sharif, D., Abdul Khir, M. F., & Ismail, F. A. (2022). Wadiah and ujrah issue in al-rahnu product: a turning point to tawarruq structure. International Journal of Academic Research in Business and Social Sciences, 12(8), 913-926.
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