INTRODUCTION
In Islam, the law of Ar Rahn (mortgage) is a permitted, that is, to mortgage something or
anything that is legal to be traded. Any goods or things that are legal in the sale and
purchase are valid to be mortgaged.
When a pledgee occurs (Ar Rahn), there are several things that will invalidate the contract. A
pledgee (Ar Rahn) will be void if the plegor debt has been paid or settled by the pledgor to
the pledgee. In addition, the charge can also be revoked if the pledgee returns the
mortgaged goods to the pledgor and the goods are damaged or the pledgor dies. If a person
is unable to pay his debts on time and causes his mortgaged goods to be sold will also cancel
the mortgage that occurred or the mortgaged goods have been rented or donated to
others. Cancellation of a charge can also be revoked if the pledgee cancels the charge
himself even without the knowledge of the pledgor.
Rahn has been permissible based on Al-Quran, Sunnah and Ijma’. Based on Quran 2:283,
Allah says, ‘If you are on a journey and cannot find a scribe, then use the receipt of pledged
objects’. This is a significant verse to point out that Rahn is an alternative to documenting
the debt with absence of scribe. Rahn is permissible for travel and non-travel according to
the majority of jurists and Prophet Muhammad SAW has permitted Rahn without any
conditions.
THE CONCEPT OF AR-RAHN
Al-wadiah yad Al-Amanah (Trustworthiness)
A deed of faith in which the trustee (bank) is granted permission to retain the depositor's
assets in his safe keeping. The individual is given clear and comprehensible contract
information.
Al-Wadiah yad Dhamanah (Safe keeping with guarantee)
A safe keeping service that is guaranteed The bank takes payments from customers
(depositors), and is subsequently given authorization to use the funds for investing interests.
Qardhul Hasan (Benevolent loan)
The consumer pays back the original amount owed without charge, mark-up, or a stake in
the enterprise whereby the loan was utilised. Because the consumer is not paying the
creditor for the money provided, this offer complies with the Sharia ban on riba.
Al Ujrah (The fee for safe keeping)
Ujrah is a wage payment made by the tenant (benefit user) to the leaseholder (beneficiary)
in exchange for the advantages received.
TYPE OF INSTITUTION PROVIDE AR-RAHN
In the year 2019, the news reported that the number of Ar-Rahn outlets has expanded to
354 outlets across the whole country. All the outlets particularly owned by a number of
agencies such as Permodalan Kelantan Berhad, Muassasah Gadaian Islam Terengganu,
YaPEIM, Agrobank, Bank Rakyat, and cooperatives. Furthermore, the institution that
provides Ar-Rahn is not only banks but can be provided by non-banks like Pos Malaysia,
YBU-YaPEIM, Public Gold, and Ar-Rahnu X’change that applied the same Ar-Rahn service
which is a short-term Islamic mortgage facility that provides immediate cash facilities.
Before the development of Ar-Rahn, Muassasah Gadaian Islam Terengganu is the first outlet
that introduces Ar-Rahn in Malaysia the year of 1992. Soon throughout the time, Ar-Rahn
became more well known and successful compared with conventional pawn shops due to
the charging interest which opposed Islamic teachings that were called as riba’. Among all
the outlets Ar-Rahn in Malaysia, Bank Rakyat is the largest and successful cooperatives in
Malaysia which has operated the most number of outlets as 127 in total.
PILLAR VALID AR-RAHN CONTRACT
Property that has been mortgaged does not belong to the pledge so the mortgage cannot
take any benefit from the property which has been set for collateral because it is still the
owner property and the owner can get the benefit from its expenses unless the mortgagee
gives permission. As an applicant, the loan for collateral is gold jewellery or gold. The
collateral will be auctioned and the amount that gets from the auction will be used as
repayment if only the applicant is unable to repay the amount of loan. Kharofa (1997)
explains that pledge cannot be binding except with acceptance of the object and can only be
conducted by a person who is accountable, free, not bankrupt or interdict insanity and adult
with discerning. Naim (2013) share In pillars of ar-Rahn contract there is also argument
between scholars when they are determining and discussing. In scholar of Hanafi, Rahn is a
charitable contract where they believe ijab (verbal offer) is the only one pillar but qabul
(verbal acceptance) is just a condition that is not compulsory for pledge while in another
three scholars believe that ar-Rahn has four main pillars.
The four main pillars are the two contracted parties which are rabin (pledgor) and murtabin
(pledgee) where this is to aim on who is eligible to make the transaction such as mature age
and sane for pledge (people that make a contract). Next is sighah (verbal offer and
acceptance) where this is different between Hanafi and other Islamic jurist discussion where
Islamic jurists prescribe the necessity of the existence of both sighah while Hanafi only one
which is ijab. Protected debt and right in a pawn contract is the third pillar while the thing
giving as pawn is the last pillar. The Islamic jurist agreed debt can be permissible created by
pawning but there is argument about pawning an object which is “Allah said that pawning is
only permits for debt” but, Maliki and majority Hanbali view that it is permissible for
pawning an object for the purpose to protect the debt or hold up if the debt is failed to be
repay so can claim it from price of pawn but the object must be specific which is ‘ainmithli
(similar objects exist in market and it is replaced) and not belong to musha’ (partnership).