Application of Tanāzul in Ṣukūk and Preference Shares: A Critical Analysis from the Sharīʿah Perspective

Abstract

Tanāzul (waiver) is a concept that is frequently applied in various Islamic financial products. Despite the growing usage of this concept, some contemporary practices in the industry remain debatable among some Sharīʿah scholars as a result of the arising Sharīʿah issues. This paper accordingly attempts to analyse some Sharīʿah issues in the application of tanāzul in the Islamic finance industry, especially with reference to subordinated ṣukūk and preference shares. Two aspects are particularly emphasised.