By Edib Smolo
ABSTRACT
Islamic financial industry experienced an extraordinary growth over the last few decades and promises to grow even further. The current global financial crisis made some believe that the time has come for the Islamic finance to assume a greater role in the world’s financial architecture. They failed to realize that the Islamic finance has several issues that need to be addressed in order to avoid its alienation from the ideals as advocated by the pioneers of the Islamic finance. One of these issues is the al-bayc bithaman ājil, or better known by its acronyms BBA. BBA initially was developed as a temporary solution for Islamic banks in Malaysia. However, its status has not been changed yet as it is predominantly used by the Islamic banks in Malaysia. This paper tries to critically review the BBA and its practice within Malaysia. It argues that the current practice of BBA is nothing more but a legal device. If this practice continues, the paper argues, it will lead to the convergence of Islamic banks towards its conventional counterparts. Finally, it is believed that the way out of this situation is either to use BBA mechanism in its true sense or to develop new modes of finance that will be a better representative of the Islamic financial system.
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