Hamish Jiddiyyah and Arboun - Shariah, Regulatory, Accounting & Risk Management Perspective
Hamish Jiddiyyah and Arboun have evoked a number of issues that are of interest not only to the industry practitioners but also other stakeholders like regulators and academia. Most of these issues need to be subjected to Shariah scrutiny for effective application. This paper is an attempt to identify contemporary Shariah rulings, regulatory perspective and risk management relating to Hamish Jiddiyyah and Arboun. It, inter alia, includes definition, permissibility or otherwise and practical modalities related to these two types of deposits or advance payments that the Islamic banks can demand from customers. This paper also highlights accounting treatment recommended by AAOIFI and brief commentary on current practice followed by IBIs in Pakistan. Further, Market and Credit Risk modalities emanating from Arboun and Hamish Jiddiyyah have also been discussed as applicable to contemporary Banking Murabaha, Operating Ijarah and Ijarah Mutahia Bittamleek. Last but not the least, this paper also identifies changes notified by State Bank of Pakistan while adopting Shariah Standard in 2010 viz., Murabaha to the Purchase Orderer with respect to Arboun.