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The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 153rd Meeting
The Shariah Advisory Council of Bank Negara Malaysia (SAC) held its 153rd meeting on 25 November 2014. The meeting discussed amongst others issues relating to the draft Shariah Standard on Istisna` and proposal on new settlement mechanism for interbank GIRO (IBG) transaction for Islamic Financial Institutions (IFIs).
On the Shariah Standard on Istisna`, the SAC decided that in the event of early settlement by the purchaser (mustasni`), the seller (sani`) may waive part of the outstanding agreed price in the form of rebate (ibra’) to the purchaser. For late delivery of the istisna` asset by the seller, the SAC decided that the contracting parties may agree, at the time of entering into the contract or during the contract, to include a clause to impose a late delivery charge (al-shart al-jaza’i) for the late delivery and the amount can be recognized as income to the purchaser.
Under parallel istisna`, if a purchaser has already contracted to purchase an asset from a developer/manufacturer, the IFI (which assumes the role of the seller) shall establish its ownership to the asset before selling it to the customer in either the following manner:-
(i) through the purchaser terminating its contract with the developer/manufacturer; or
(ii) through other means of acquiring the asset.
The SAC also approved a new settlement mechanism for inter-bank GIRO (IBG) transaction for IFIs proposed by the Malaysia Electronic Clearing Corporation Sdn. Bhd. (MyClear). The settlement mechanism involves the selling of securities kept in the Real-time Electronic Transfer of Funds and Securities System (RENTAS) by the participating IFIs to BNM. The proceeds will be utilized to make up the shortfall of the fund for the settlement of IBG transactions. The SAC also recommended BNM to explore the feasibility of applying bai` al-dayn bi al-sila` (sale of debt with commodities as counter value) for the transaction of debt-based securities in meeting the shortfalls of IBG transaction settlements in the future.
This article is also available in Arabic version
