Tawarruq Time Deposit With Wakalah Principle: An opinion That Triggers New Issues

The development of Islamic banking system in offering the products which is based on the shariah principles has witnessed a tremendous success. There are many new products being introduced as alternatives to conventional ones. Yet, at the same time, some of these products remain hotly debated amongst jurists on their validity and subsequently become non-compliant products. One of such products that have been introduced is tawarruq-based deposit product. In addition, the newly introduced Islamic Financial Services Act 2013 states that deposit products which are characterized as principal guaranteed feature could not be offered based on mudarabah or wakalah as they are only appropriate for investment products (principal non-guaranteed products). Therefore, the introduction of tawarruq-based deposit product by Islamic banks could be the best alternative to take place. However, the wakalah principle is also embedded in this twarruq deposits. Hence, this paper makes an attempt to analyze the adoption of wakalah in the tawarruq deposit that may trigger new issue.