PTPTN is a statutory body which
responsible to manage the financing of education for students in both public and
private higher education institutions in Malaysia. PTPTN was established under
the National Higher Education Fund Corporation Act 1997 (Act 566) which came
into force on July 1, 1997. Students can apply loan from PTPTN to finance their
education and pay back PTPTN once they complete study.
PTPTN practices riba in its operational before turning
to ujrah. Prior to 2009, PTPTN charged 3% interest on PTPTN borrowers. For
example, if borrowing worth RM 19,000 is required to repay RM 23,083.89 after
adding a 3% interest for the 10 years payment period. The additional 3% paid by
the borrower to PTPTN contains the element of Riba.
Malaysian National Religious Council Fatwa Committee convened on 28 July 2008
resolved to agree on the service charge charged by PTPTN to the students on the
concept of Ujrah at reasonable rates and not burdensome students. The PTPTN can
charge compensation (ta’widh) to students who have earned a fixed and capable
job from financial aspect but intentionally do not want to repay PTPTN
financing. Thus, the Riba element has been removed from PTPTN.
Gharar in conventional insurance occurs
due to the uncertainty of compensation to be paid by the insurer from the point
of its existence and duration. In shari’ah, one of the conditions in a sale and
purchase contract is the delivery of prices and goods within a period, and both
parties need to be clear of the existence and time of delivery.
The conventional insurance contracts
are containing Gharar element in four states:
a) The doubt about the duration of the
b) The existence of contracts and
c) Payment of compensation; and
d) The actual amount of compensation or
These Gharar are attributed to the
uncertainty of participants about when the insured event will take place and
how far the impact to the policyholder when the contract is signed. This
problem arises because the outcome of the insurance contract itself is affected
by the fate and the amount of money provided by individual is different or
known as aleatory.
In conventional insurance contracts, participants will not know whether the
disaster will happen nor do they know when the compensation payment will be paid.