ISB 540 ISLAMIC BUSINESS TRANSACTION (jarak sekali enter) BANK KERJASAMA RAKYAT: AN ANALYSIS ON AR-RAHNU PRODUCT (jarak

3 kali enter) GROUP NO: 09 (jarak 1 kali enter) NAME STUDENT ID AFANDI BIN ZUBIR 2009672728 SHAHRUL NIZAM BIN IDRIS 2113680002 MUHAMMAD AZLAN BIN ABDULLAH 2009878916 (jarak 3 kali enter) PREPARED FOR EN. MUHAMMAD YUSRI BIN YUSOF @ SALLEH (jarak 3 kali enter) SEMESTER 5 SESSION 2011-2012 (jarak 2 kali enter)
kesempurnaan data Data
3 2.5 2 1.5 1 3

GROUP BE05 BE05 BE05

penganalisaan data Otoriti
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komitmen Ruj
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bahasa
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idea
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jawapan
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Proses
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CONTENTS ACKNOWLEDGEMENTS

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PREPARATION PROCESS OF TASK

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DECLARATION

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HISTORY OF ISLAMIC PAWNSHOP

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MALAYSIAN PRACTICE ON AR-RAHNU SCHEME

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SYARIAH BANKING CONCEPT

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7 HISTORY OF BANK KERJASAMA RAKYAT 8 HISTORY OF AR-RAHNU PRODUCT

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AR-RAHNU PRODUCT

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CONCLUSION

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REFERENCES

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Not forgetting the head of our group because Afandi Bin Zubir has successfully led this task with distinction in the division of labor. a roll thanks to Muhammad Azlan Bin Abdullah and Shahrul Nizam Bin Idris. 3 . we offer thanks giving to the Almighty for giving opportunity and sufficient time to complete this task. Finally. Thank you. First of all.t.ACKNOWLEDGEMENTS Assalamualaikum w. thanks also to my classmates the other as also assist in providing additional information and share ideas to our group. Appreciation also goes to Ustaz Muhammad Yusri Bin Yusof @ Salleh as our lecturers and monitoring has helped us in completing this task from time to time and gave all useful guidance to us. that prepares a part of their particular task.b. In addition. Cooperation of all parties is appreciated.

Typing: Introduction Muhammad Azlan Bin Abdullah History of Bank Kerjasama Rakyat Afandi Bin Zubir Conclusion Shahrul Nizam Bin Idris Layouts and Updates Afandi Bin Zubir Shahrul Nizam Bin Idris Muhammad Azlan Bin Abdullah 4 . Shahrul Nizam Bin Idris Ar-Rahnu product of Bank Muhammad Azlan Bin Abdullah Kerjasama Rakyat.PREPARATION PROCESS OF TASK Task Information search. Members Afandi Bin Zubir Shahrul Nizam Bin Idris Muhammad Azlan Bin Abdullah Group discussion: Afandi Bin Zubir History of Islamic pawnshop.

We have used the available resources at its best. YOURS FAITHFULLY. (AFANDI BIN ZUBIR) (SHAHRUL NIZAM BIN IDRIS) (MUHAMMAD AZLAN BIN ABDULLAH) 5 .DECLARATION We hereby admit that we did not do any form plagiarism.

or 24 percent per annum. n. the Islamic pawnshop (ar-rahnu scheme) is the most appropriate mechanism as it provides a financial product for the lower-income group and small businesses which usually have limited capital or have been excluded from the mainstream financial system. However. In fact. Before the implementation of the Islamic pawnshop system. as well as safeguarding the interests of the consumers. it seemed to encourage the practice of usury.0 HISTORY OF ISLAMIC PAWNSHOP The important of helping the needy especially the poor has long been emphasized in much of Islamic faith. Therefore.d.). The purpose of the Pawnbrokers Act 1972 was to guarantee a healthy pawnshop industry. The conventional pawnshops were more motivated on making profit from the needy individuals and this activity was only restricted by the laws in the Pawnbrokers Act 1972.). The conventional pawnshops had indeed oppressed and put a burden on the lower-income group (Azila Abdul Razak. lending to the needy should be the main focus in Islamic finance. the conventional pawnshops had charged high interest rates on the loans given. it failed to control the problems of the oppression of the lower income group and the pawnbrokers‟ malpractices. The high interest rates make it difficult for the consumers to reclaim their goods or jewellery. As for 6 . with high interest rates of 2 percent per month.1. In this context.d. Prior studies have shown the importance of Islamic pawnshop to the Muslim societies (Azila Abdul Razak. n.

n.d. 7 . n. usurious and exploitative activities imposed by the conventional pawnshop makes the customers choose to deal with the Islamic pawnshop (Azila Abdul Razak.those who need the loan as a business capital.). they find that their capital is rapidly diminishing.d.). The concern over higher interest rates. The conventional pawnshop system is more likely to put a burden on the lower-income group and this is against the Shari‟ah practices (Azila Abdul Razak.

The collateral for the loans may be in the form of gold or diamond jewellery.d. n.2. If the customer fails to pay in three months.).1 MUASSASAH GADAIAN ISLAM TERENGGANU (MGIT) Muassasah Gadaian Islam Terengganu (MGIT) is given an honour by Bank Negara Malaysia as the first Islamic pawnbroking operating in January 1992 under the rule of the State Council for Religion and Malay Customs. If they fail to pay after the extension period. The loans offered in the MGIT ar-rahnu scheme are free from interest (qardhulhassan). Also. The sole objective is to fulfill the needs and welfare of the less fortunate (Azila Abdul Razak. The loans given should not be more than 75 percent of the jewellery‟s value. the customer is only eligible for loans up to RM1.). n.d. This is known in Islamic banking as „hibah‟ or gift (Azila Abdul Razak. A Muslim who has borrowed from his friend is encouraged to repay a little extra as a symbol of gratitude. 500 for each item. 8 .). If there is any surplus after the loan has been settled. it will be returned to the customer (Azila Abdul Razak. n. they can apply for an extension for three months.0 MALAYSIAN PRACTICE ON AR-RAHNU SCHEME 2. customers are encouraged to contribute a small sum to the Muassasah treasury account.d. However. the collateral will be auctioned by MGIT to pay off the loan.

Those who are unable to pay back may extend the pawning period. 2.9 million in 2005 (Azila Abdul Razak.732 customers in 1992 which increased to 26. The customers need to show valid proof of ownership of the goods. n. It is part of the Kelantan government‟s effort to help those in need by giving out interest-free loans. Business of MGIT has been flourished since its first formation. through its subsidiary. as it started with 12.). If customers are still unable to pay back after the 9 . The pawning period is six months.d. The collateral accepted is only in the form of gold jewellery. subject to approval of both parties and the customers need to pay the safekeeping fees of the previous six months.This service is available for those 18 years old and above and it gives priority to the residents of Terengganu only.d. The loan given is 60 percent of the value of jewellery and not more than RM5.632 customers in 20059. Permodalan Kelantan Berhad had set up Ar-Rahn as the second Islamic pawnshop in Malaysia in order to fulfil the syariah needs.2 PERMODALAN KELANTAN BERHAD In March 1992. The arrahnu system in Kelantan collects a certain fee for safekeeping of pawned goods (Azila Abdul Razak.).85 million in 1992 to RM28. The value of pawned items has increased from RM9.000. n. the Kelantan State Economic Development Corporation.

ring.). 2.extension period. the ar-rahnu pawnshop will send an auction notice before the auction is held by licensed auctioneers. All types of gold. n.).000 subject to RM5.000 daily limit. A loan of not more than 60 percent of the market value of pawned goods will be issued. earring. and can be extended to three months with the final extension of another two months (Azila Abdul Razak. Maximum loan is RM50. This scheme is open to Malaysian residents of 18 years above. while the pawning period is six months. brooch and others are accepted.d.d. The bank introduced the scheme to meet short-term financial needs of the rural people who are mainly farmers and fishermen to improve their business and modernize their methods. 10 . bangle. n.3 BANK PERTANIAN MALAYSIA Bank Pertanian Malaysia has introduced the ar-rahnu scheme in 12 of its 132 branches nationwide. The customers are eligible to get any balance of the auction price after subtracting costs and any debts (Azila Abdul Razak. jewelery such as necklace.

As wadiah is a trust. and the Bank becomes wholly responsible and liable in the management and investment the deposits in halal business ventures.2 AL-MUDHARABAH (PROFIT-SHARING) Al-Mudharabah refers to an agreement where customers deposit capital in the Bank.d. when demanded. 11 . and the Bank becomes wholly responsible and liable for its safekeeping. based on margins agreed upon earlier.). In the case of losses. or any part thereof. it can be implicated in any sale contract. 3. In fact. including sale contract. the losses are borne by the provider of the funds (Overview of Islamic Banking in Malaysia. the depository becomes the guarantor and. 3. therefore guarantees repayment of the whole amount of the deposits. including musawamah.).3 BAI-BITHAMAN AJIL (DEFERRED PAYMENT SALE) Bai-Bithaman Ajil refers to the sale of goods on a deferred payment basis at a price which includes a profit margin agreed by both parties. and murabahah (Khairuddin Zakaria.d.0 SYARIAH BANKING CONCEPT 3. 2011).3. The depositors are not entitled to any share of the profits but the depository may provide returns to the depositors as a token of appreciation (Overview of Islamic Banking in Malaysia. n.1 AL-WADIAH (SAVINGS WITH TRUST/GUARANTEE) Al-Wadiah refers to agreement where customers deposit money in the Bank. outstanding in the account of depositors. Profits gained will be divided and distributed accordingly. n.

5 AL-MUSYARAKAH (JOINT VENTURE) Al-Musyarakah refers to a partnership or joint venture for a specific business purposes with a profit motive. It is however legitimate for a borrower to pay more than the amount borrowed as long as it is not stated or agreed at the point of contract (Sharia UMEX. 2010).3. 2010).6 QARDHUL HASSAN (BENEVOLENT LOAN) Qardhul Hassan refers to an interest-free loan.d. 3.4 BAI-AL'INAH (IMMEDIATE CASH) Bai-Al'Inah refers to the selling of an asset by the Bank to the customer through deferred payments.). the Bank will repurchase the asset and pay the customer in cash terms at a discount. which is lower than the deferred price (Sharia UMEX. whereby the distribution of profits/losses will be apportioned according to the capital contributed. as a token of appreciation. but he may pay an additional amount at his absolute discretion. It can also be applied when a seller sells an asset to a buyer on a deferred basis. both parties will share the losses on the basis of their equity participation (Overview of Islamic Banking in Malaysia. 12 . At a later date. n. In the event of losses. A seller will later buy back the same asset on a cash basis at a price. 3. The borrower is only required to repay the principal amount borrowed.

(Bank Rakyat. the bank owns the goods (Affin Bank. the customer enters into a second contract to purchase the goods from the Bank at an agreed price. the customer hires the goods from the Bank at an agreed rental amount over a specified period.During the period of the agreement.3.7 AL-IJARAH THUMMA AL-BAI' (HIRE AND PURCHASE) Refers to two contracts undertaken separately and subsequent as follows: a) Al-Ijarah contract (hire) b) Al-Bai' contract (purchase) Under the first contract. 2010) 13 . 2011). Upon expiry of the hiring period.

0 HISTORY OF BANK KERJASAMA RAKYAT 4. 2011). Bank Rakyat was placed under the Ministry of Land and Co-operative Development and the Ministry of Finance. Subsequent changes in the by-laws also resulted in the creation of its subsidiary companies and opening of branches to serve customers as well as members. the co-operatives set up their respective union banks provide financial needs to their members. Bank Rakyat is governed by it‟s laws and Bank Kerjasama Rakyat (M) Berhad Act 1978 (Special Provision 202). following an expansion of the cooperative movement in Peninsular Malaysia. To facilitate the expansion of the cooperative movement. Bank Rakyat took a giant step towards becoming a syariah co-operative bank by 14 . 11 of these union banks decided to merge and form Bank Agong (Apex Bank). In 1993.4. On 8 May 1993. In 1989. the name was changed to Bank Kerjsama Rakyat Malaysia Berhad or better known as Bank Rakyat. On 6 January 1973. the Cooperative Act was reviewed which allows the Bank to operate in Sabah and Sarawak.1 BACKGROUND OF BANK RAKYAT Bank Rakyat was established in September 1954 under the Cooperative Ordinance 1948. which allows Bank Rakyat to provide financing to non-members (Bank Kerjasama Rakyat. Bank Kerjasama Malaysia Berhad replaced Bank Agong with its membership opened not only to the cooperatives. In 1967. but also to individuals. On 28 September 1954.

Hence. Bank Rakyat has a total of 127 branches offering Islamic banking facilities to its customers (Bank Kerjasama Rakyat. To date. 2011). On 15 April 2009. 2011). with this major decision. Bank Rakyat became a full-fledged Islamic cooperative bank in 2002. 15 .introducing Islamic banking products at four of its branches. Bank Rakyat together with six other financial and development institutions was placed directly under the supervision of Bank Negara Malaysia (Central Bank of Malaysia) under the Development of Financial Institution Act (DFIA). Bank Rakyat was placed under the supervision of the Ministry of Entrepreneur and Cooperative Development. Co-operatives and Consumerism. after the cabinet restructuring. Bank Rakyat was absorbed under the Ministry of Finance and was later placed under the Ministry of Domestic Trade. Bank Rakyat marked another milestone in history where it became the third bank to offer total Islamic banking products in Malaysia (Bank Kerjasama Rakyat. On 15 February 2002. On 27 March 2004.

Malaysia Practices of Ar-Rahnu Scheme: Trends & Development.0 HISTORY OF AR-RAHNU PRODUCT The Bank Kerjasama Rakyat Malaysia Berhad ar-rahnu scheme was introduced in 1993. If the customer fails to claim the goods. A fee for safekeeping the goods is collected based on the value and the pawning period (Azila Abdul Razak. It is not for profit and thus. the bank had also opened the first stand alone Kedai Ar-Rahnu in Kota Bharu. The scheme is open to Malaysian residents aged 18 and above and not more than 65 years old.). The bank will subtract the loan amount. Interestingly. the customers will benefit from it. the pawnbroker will disposed the goods by auction to the licensed auctioneer. the bank will send a notice to auction off the goods. if the customer is unable to claim the goods. Loans for the pawned goods will not be more than 50 percent of the goods value. Then the balance will be given to the customer. These schemes are more of a social oriented to customers. Maximum loan is RM5. After the third reminder. Suppose the value of the item pawned is worth 16 . Only gold jewellery is accepted as collateral. Pawning period is only six months. which may be extended for another three months.5. Kelantan in June 2000. After six months. a second reminder will be issued.000 for each time or a cumulative worth of RM25. n. fees for safekeeping and other costs involved in the auction process from the auction profits.d.000 for each customer. It was first introduced in six branches but now there are 112 branches (including Kedai Ar-Rahnu) operating throughout Malaysia. A week before the six month period. the bank will send the first reminder.

the bank will subtract RM1. Malaysia Practices of Ar-Rahnu Scheme: Trends & Development.000. then the balance of RM519. n. Datuk Kamaruzaman Che Mat points that through its fully owned subsidiary.). If the fee for safekeeping is 65 cent for every RM100. is aiming to open 15 branches of the Islamic based pawn franchise outlets.08 for six months (Not surprisingly.RM1. Pokok Sena. In future.00 with repayment period of six month.).666. If the goods are auctioned at RM1.666. then the fees will be RM10. customer of conventional pawnshops will have to pay almost double which cost RM20). 17 .d. which is called Ar-Rahnu X-Change. Rakyat Management Services Sdn Bhd.00.12 for safekeeping fees (9 months) and administration fees for the auction RM50. n. RM96. and Sri Gombak (managed by Koperasi Serbaguna Iman Malaysia Bhd) (Azila Abdul Razak. in the next three years. To date. the Managing Director of Bank Rakyat.000. Kedah (managed by Koperasi Kementerian Kesihatan Negeri Kedah Bhd). Malaysia Practices of Ar-Rahnu Scheme: Trends & Development. Kuala Lumpur (managed by Koperasi Pendidikan Islam Malaysia Bhd).d.00 and the bank will only release a maximum loan of RM1. Bank Rakyat planned to expand the Ar-Rahnu outlets to various locations such as Medan Tuanku.68 per month or RM64.88 will be returned to the customer (Azila Abdul Razak. with the same amount of loan.00 for the loan.

0 AR-RAHNU PRODUCT 6. Provide alternative to the community especially for the lower income group in fulfilling their immediate cash flow needs. Term and condition for applicant eligibility i. Abolish element of “interest” in pawn broking management. Emancipate the group of borrowers especially Muslims from being abuse by conventional pawnbroker. Malaysian citizen of age 18 years old and above 18 . sell-off and steps to undertake in the event of emergency and crisis management. 3. 2.6. 6. 1. (Bank Kerjasama Rakyat.1 OBJECTIVE The objective is to introduce a scheme for the following: 1. 2011).2 CLARIFICATION The procedure begins from the workflow of supply logistics to safekeeping to workflow of acidtesting.

ii. For applicants age 65 and above. 2011).3 TYPES OF AR-RAHNU PRODUCT 6. d r u g g e d o r under hallucinatory state or drunk while conducting transaction) iv.00. Not a bankrupt and mentally incapacitated or retarded ( n o t i n e b r i a t e d .000. iii. Staff of Ar-Rahnu X‟change inclusive of spouses. the shop outlet must ensure and check authenticityand purity of gold valuables to guarantee value and quality. parents and children are not allowed to apply for pawning facilities (Bank Kerjasama Rakyat. 19 . 6.000.3.1 Ar-Rahnu This scheme provides a source of immediate financing to assist individuals inn overcoming cash-flow needs. The applicant should recide in the vicinity of the operating outlet and is readily contacted v.00 per day and a cumulative amount not exceeding RM50. Quantum of Financing:   Financing up to 70% of the pawned gold value (Marhun value) Each pawned item not exceeding RM10.

Safekeeping fee for every Type of Financing Amount Scheme month RM100.000.00 .00 RM0.000.Repayment Period:   Financing tenure : 6 months only Extension period : 6 months (mutiple extensions) subject to settlement of safe keeping fee for the past 6 months Pawn Products: Gold jewellery 18K .RM10.RM1. 20 . 2011).001.00 .00 of gold value per (Bank Kerjasama Rakyat.75 RM0.24K Fees: A minimum fee is charged for the safekeeping of the valuables.65 RM100.00 Ar-Rahnu RM1.

00 and a cumulative amount not exceeding RM100.001. Quantum of Financing:   Financing up to 70% of the pawned gold value (Marhun value) Each pawned item exceeding RM10.24K 21 . This facility offers a higher facility amount and a longer repayment period. Az-Zahab also offers instant cash to overcome financial needs.2 Az-Zahab An extension of the Ar-Rahnu scheme.6.000.3.00 Repayment Period:   Maximum 36 monthly installments or Lump sum payments for a 6 months period Acceptable Items: Gold jewellery 18K .

65 cents = RM 6. 2011). Value of loans provided = 60% x RM 3000 = RM 1800 Wages store = (RM 1000 / 100) x 0.000 or less.RM100.75 cents = RM 15 per month Total wages store 6 month = RM 6.00 .Fees: A minimum fee is charged for the safekeeping of the valuables.50 x 6 per month = RM 39 = RM 15. 6. Profit is derived from fees to keep the pledged assets. Safekeeping fee for every Type of Financing Amount Scheme month Az-Zahab RM10.4 CALCULATION Under the Islamic system.000.001.50 per month = (RM 2000/100) x 0.00x 6 per month 22 .75 RM100. Islamic pawnbroking business (murtahin) does not charge interest (riba).00 of gold value per (Bank Kerjasama Rakyat.00 RM0. If the collateral value is RM 3.

2010) 23 . (Muhammad Yusri Yusof. to redeem the borrower (Rahin) have to pay murtahin RM 1929.= RM 90 = RM 90 + RM 39 = RM 129 Consequently.

iv. v. and it is truly in line with the co-operative principle. Issuance of notices to customers. 24 . Interest free. iii. Islamic mortgage system is important to middle class and lower of the Malaysian society. we can found that there are several advantages of using this concept.There are some advantages of Ar-Rahnu: i.7. Secured safekeeping with insurance coverage for the pawned items. Ar-Rahnu can be the main source of business capital and widely accepted and used by the society in their day to day business. vi. Transparent and customer friendly counters. Without ar-Rahn they will be pushed to engage with interest that practiced by Pawnbroker shops and “Along” in fulfilling their needs. All transactions are recorded clearly. Ar-Rahnu can be an economic tool to improve the socio-economic development of the lower and middle income society. ii. Excess from the auction will be returned to the customer.0 CONCLUSION Ar-Rahn is an alternative to conventional mortgage system for Malaysian. After we study about Ar-Rahnu product of Bank Kerjasama Rakyat.

affinbank.ukm. Retrieve from http://www. (2008). Retrieve from http://www.blogspot. Retrive from http://lebaiyusri. (2010). Malaysian Practice of Ar-Rahnu Scheme: Trends and Development.com.com/2010/03/sistem-gadaian-di-malaysia-analisis.bankrakyat. (2004). Overview of Islamic Banking in Malaysia.my/~hairun/EX3613/Overview%20of%20Islamic%20Banking %20in%20Malaysia.html 25 .8. Sistem Gadaian di Malaysia: Analisis Perbandingan.0 REFERENCES Internet reference: Universiti Kebangsaan Malaysia.my/web/guest/syariahbankingconcept Internet reference: Sharia Ummah Securities Information Exchange Ltd.my/banking/hirepurchase/hpaitab.com/glossary. (2010).php Internet reference: Affin Bank Berhad.shariaumex. Blog reference: Muhammad Yusri Yusof (2010.pdf Internet reference: Bank Kerjasama Rakyat Malaysia Berhad.htm Journal reference: Azila Abdul Razak.com. March 30). Retrieve from http://pkukmweb. (2011). Retrieve from http://www.

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