The practice of musharakah mutanaqisah at Malaysian Islamic banks: an empirical review
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Among many permissible Islamic finance products, Musharakah or the partnership contract was put forward as a true representation of the PLS concept in the late 1970s. However, due to challenges to fully implement this type of contract in practice, practitioners have improvised a more practical version of the partnership contract termed Musharakah Mutanaqisah (MM) (or Diminishing Partnership). Currently, Musharakah Mutanaqisah is applied in home financing by Islamic banks and proposed as a replacement for Bai Bithaman Ajil and Bay al Inah in Malaysia. Despite the increasing popularity of MM in home financing in the Malaysian Islamic banking industry, there are issues in the way the Islamic banks operate and report this mode of home financing in their annual reports.
Musharakah mutanaqisah , Malaysia , Islamic banks , Islamic banking
Muhamad Sori, Zulkarnain and Ramadili Mohd, Shamsher Mohamad and Asadov, Alam. (2018). The practice of musharakah mutanaqisah at Malaysian Islamic banks: an empirical review. CIAWM Bulletin, 3 (2017), pp. 15-19.
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