Mohd Ab Malek, Zainab Hj Mohd Zain, Mohd Harun Shahudin, Sulaiman Mahzan, Siti Fairuz Nurr Sadikan




In the normal conventional banking system, customer only has to pay the outstanding principal        amount and earned interest at the time when early settlement is made. The financier normally waives the unearned interest. Contractually, customer in Islamic financial system has to settle total outstanding selling price in the case of early settlement. On the other hand, Islamic bank normally give rebate to its customer who made early settlement. This practice of rebate is important to maintain the competitiveness of Islamic banking as a mechanism of providing mutual help in terms of charitable matters within a Muslim society, which is highly recommended by syariah principles. Hence, the concept of ibra` which resembles with the rebate payment has been introduced accordingly. This concept is actually more suitable for the financier who wants to surrender its right over the debt to customers. Hence, this paper is aimed to explore the fundamental concept of ibra’ as practiced by the bankers currently within the ambit of Islamic teaching. In addition, it is hoped that; throughout this study, it would lead to the betterment of understanding of this concept holistically.


Keywords: Ibra’, Interest, Rebate, Financier, Syariah


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