Abstract

The objective of this study is to look into the proper practices in handling of a product of shari’ah-compliant banking, namely the deferred payment sale (al-bai’ bithaman ajil). The elements of violation of shari’ah dictates in dealing with shari’ah-compliant banking practices were identified. This study contributed in term of understanding the issues that need to be improved as innovation at the banking institution level in the form of standard procedural instruction or policy. Exploratory approach to research method was extensively used in this study as such method is relevant for the research issues being studied. The evidences were derived from field work conducted on one type of investment product, al-bai’ bithaman ajil of a bank.  Capitalizing on the explored and examined shortcomings, improvement on the manner that such shari’ah-compliant banking instrument be handled in efficient and effective ways in order to compete in the intense local and global markets are recommended.

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