Ujrah Credit Card: a Perspective from Shariah Advisory Council, Bank Negara Malaysia

Abstract

The demand for Islamic banking products in Malaysia is increasing over time, and this includes the demand for Islamic credit card products which are considered as an alternative to replace conventional credit cards in the market. Several Islamic banks in Malaysia currently issue Islamic credit cards based on the ujrah concept. According to ujrah concept, the bank will charge cardholders an administration and maintenance fee (ujrah) for their Islamic credit card. However, the use of the concept of ujrah in Islamic credit cards has raised several Shariah issues and requires a solution by the Shariah Advisory Council (SAC) Bank Negara Malaysia (BNM). Among the issues are the necessity to use of the ujrah credit cards, the benefits of takaful protection for credit card holders in Islam and rebates (ibra’) in the form of cashback on credit card annual fees. BNM’s Shariah Advisory Council is a committee that plays the role of safeguarding and ensuring that the bank’s activities as a whole are based on Shariah principles, whether in the field of muamalat, services offered and relationships with other banking institutes to obtain the best profits and investments. Continuing from this issue, the purpose of this study is to examine the context of Islamic credit cards based on the concept of ujrah, to highlight Shariah issues concerning the practice of ujrah in Islamic credit card operations, and to examine the role of SAC BNM in resolving such issues through resolutions issued based on usul al-Fiqh and maqasid alShariah analysis. This study applies a qualitative research approach in which the data in this study was obtained from secondary sources that is through a literature review approach. Data were collected from classical manuscripts, modern literature, journals, books, and SAC, BNM Shariah resolutions. Meanwhile, data analysis was done by using content analysis method. The results of the study found that the SAC BNM has complied with the appropriate standard and criteria in determining the ujrah-based credit card products to comply with Shariah. This study provides guidance to the SAC BNM committee to take into account the perspective of usul al-Fiqh and maqasid al-Shariah in overcoming Shariah issues related to Islamic banking and finance products in Malaysia.