Examining Issues on Islamic Shipping Guarantee

This paper is about the Shipping Guarantee (SG) facility in Islamic banks. The first objective is to describe the difference between the conventional and Islamic SG. Secondly, to investigate the establishment of Shariah issues and liabilities involving Islamic SG and the manner in which Islamic banks tackle those issues. The qualitative method is adopted, where the information on the operation of Islamic SG in twelve Islamic banks in Malaysia is gained, through semi-structured interviews conducted with the bankers. This paper discovered that there are similarities and differences between the conventional and Islamic SG, apart from the possible Shariah issue and liabilities from the operation of Islamic SG.