BERA: A new hire-purchase Act in accordance with Islamic principles will be introduced, said Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob.
He said a study of the draft Act was being discussed with a panel comprising Islamic economists and Muslim consumer associations, and it was being finalised.
The draft would also look into examples of Islamic legislation used in other countries.
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| Ismail Sabri |
Ismail Sabri said the new Act, called the Islamic Hire-Purchase Act, seeks to settle issues and financing problems usually found in common hire-purchase legislation, such as the Hire Purchase Act 1964 and Pawnbrokers Act 1972.
“The new Act will give protection not only to Muslim consumers but all consumers as well.
“This will be an alternative legislation for those who wish to buy vehicles or pawn their valuables.
“With the new Act, consumers will not have to lose their new vehicles or be penalised with higher financing rates after they have paid, for example, 75% of their loans.
“The mechanism of the loan payments under the new Act is still being studied. We have formed a panel to study the Islamic and commercial legislation concerning the proposed Act,” he said after meeting haj pilgrims at Bera mosque here yesterday.
Ismail Sabri said at present, consumers could still have the option of using the Islamic banking system for their hire-purchase and pawning needs, such as the Ar-Rahnu (for pawning) or Al-Ijarah Thumma Al-Bai (hire purchase) syariah-based systems.