USING BAY AL-INAH IN ISSUANCE OF SUKUK IN PRIMARY MARKET: A LOOK INTO SCHOLARS’ VIEW

Abstract

This is a doctrinal research. It aims to specifically look into scholars’ differing opinions on using bay al-inah to issue Sukuk in primary market and the causes of the said difference. It is found that the Shariah Advisory Council of the Securities Commission Malaysia allows using bay alinah to issue Sukuk in the primary market. However, this practice has been criticized by a big number of the Middle Eastern Countries as it involves the issue of bay’ al-‘inah. Moreover, it is found that one of the main reasons of the differences of opinions between the scholars is the different methods of ijtihad adopted in creating Islamic financial products and services (such as
using bay al’inah in issuance of Sukuk in primary market as in our context). The Middle Eastern scholars adopt comparative study method of fiqh (fiqh muqaran) in order to identify the valid principle or nearest valid principle of Shari’ah for Islamic finance regardless of which (School of thought) madhhabs they belong to, while the Malaysian scholars adopt al-talfiq and tatabbu’ alrukhas method. It is recommended that in the process of making law, the comparative study method of fiqh (fiqh muqaran) should be adopted, as it scrutinises all views and chooses the one nearest to principle of Shari’ah without inclining to any particular madhhab (school of thought). With this approach it is more likely to achieve standardization of Islamic banking and finance products and services worldwide