Musharakah Mutanaqisah in Indonesia and Malaysia: Fatwa Institution, Regulation, and Recent Practice

Musha>rakah Mutana>qis}ah (MMQ) is one of the developments of Musyarakah’s contract-based products. MMQ can be applied as an Islamic banking financing product where the portion of the share of one of the partners is diminished due to the gradual purchase or commercial transfer to the other partner. The articles aims to investigate the regulatory frameworks pertaining to MMQ in Indonesia and Malaysia. It also compares the associated institutions with the authority to issue regulations and policies surrounding the practice of MMQ. Furthermore, it analyzes and investigates a number of critical issues concerning the implementation of MMQ in both countries. This study is doctrinal legal research. It comprises on principle of law, legal systematic, synchronization of law, and legal history. The author also used statutory, conceptual, and comparative approaches. The result of the study shows that the regulatory framework in both countries was quite sufficient to accommodate the needs of MMQ costumers and practitioners. Therefore, The study's novelty lies in its comprehensive comparative analysis of the regulatory frameworks and practices surrounding MMQ in Indonesia and Malaysia.