Tawarruq - Assessment

1.

Multiple Choice

30 sec

1 pt

What is tawarruq?

Consists of two sale and purchase contracts in which the first involves the sale of an asset by a seller to a purchaser on a deferred basis.

Referred to as cost-plus financing, is an Islamic financing structure in which the seller and buyer agree to the cost and markup of an asset.

A transaction in which the buyer does not know the price paid by the seller to create or obtain the good or service being offered.

A sale and purchase transaction of an asset to be paid on later date (deferred payment) based on a price, which include a profit margin agreed to by both contracting parties.

2.

Multiple Choice

30 sec

1 pt

The following describes key principles for sound management and operationalization of tawarruq EXCEPT?

The IFI shall establish a comprehensive governance and oversight framework to ensure that a tawarruq is conducted based on sound practices and complies with Shariah

The IFI shall provide adequate disclosure and transparency to facilitate stakeholders’ understanding and assessment of a tawarruq.

The IFI shall undertake a tawarruq in a fair and transparent manner in line with Shariah to protect stakeholder’s interest

Promote end-to-end compliance with Shariah requirements which include adherence to sound Islamic banking practices and safeguarding customers’ interest.

3.

Multiple Choice

30 sec

1 pt

When does this policy document comes into effect?

28 December 2019

28 December 2018

27 July 2019

27 July 2018

4.

Multiple Choice

30 sec

1 pt

What are the two distinctive parts contained in this policy document?

Shariah requirements

Operational requirements

Shariah requirements and operational requirements

None of the above

5.

Multiple Choice

30 sec

1 pt

Which of the following assets should NOT be traded in Tawarruq?

Gold, silver and currencies

Assets to be constructed or under construction

Assets which are debt in nature

All of the above

6.

Multiple Choice

30 sec

1 pt

In the occurrence of defect option (khiyar al-`ayb), the purchaser has the right to?

terminate the sale and purchase contract

continue with mutually agreed variation of the terms of the sale and purchase contract as a result of the defect discovered

continue with the sale and purchase contract as it is

All of the above

7.

Multiple Choice

30 sec

1 pt

When is the price used for each sale and purchase contract determined?

Before entering into each of the respective sale and contract

After entering into each of the respective sale and contract

At the time of entering into each of the respective sale and purchase contract.

After delivery of asset

8.

Multiple Choice

30 sec

1 pt

The _________ in each sale and purchase contract in the tawarruq shall have the right to take delivery of the asset.

seller

purchaser

third party

9.

Multiple Choice

30 sec

1 pt

Which of the following is included in the establishment of risk management policies by the IFIs?

I Appropriate pricing methodology of the assets

II Segregation of roles and duties

III Monitoring and reporting mechanism

IV Establish risk exposure limits in line with the IFI’s risk appetite

I and II

I and III

I, II and IV

All of the above

10.

Multiple Choice

30 sec

1 pt

The following are potential Tawarruq risks that the IFIs are exposed to, EXCEPT:

Market risk

Operational risk

Default risk

Credit risk

11.

Multiple Choice

30 sec

1 pt

Which of the following shows the information that must be disclosed by IFIs to its customers?

I Roles and responsibilities of contracting parties

II Name of product

III Computation of fees and charges

IV Purpose of the Tawarruq

III and IV

I and II

I, III and IV

I, II, III and IV

12.

Multiple Choice

30 sec

1 pt

Which of the following criteria that must be assessed by the IFIs before selecting their asset trader or asset exchange is NOT TRUE?

Easy access to trading platform/ exchange

Financial performance

Availability of Shariah compliance oversight function

Adequate delivery capacity

13.

Multiple Choice

30 sec

1 pt

Who is in responsible to deliberate and endorse that the terms and conditions in documentation is complied with Shariah requirements?

Board of Directors

Shariah Committee

Senior Management

Central Bank of Malaysia

14.

Multiple Choice

30 sec

1 pt

The contracting parties in tawarruq should involve ______ EXCEPT

Asset Trader

Manufacturer

Customer

Islamic Financial Institution

15.

Multiple Choice

30 sec

1 pt

In which condition, the IFI as an agent is not allow to treat the payment (fund received) as qard (loan) when executing tawarruq?

Normal close of business

Unexpected disruptions to operation

Reasonable period required to process application

Health issue of agent

16.

Multiple Choice

30 sec

1 pt

In order to be traded in tawarruq, an asset must sastify the following conditions EXCEPT

Can be objectively valued in the open market

Acceptable contract grade specified by recognised commodity exchange or accepted industry standard

In a good condition before completion of both sale and purchase transactions

Recognised as intangible asset under applicable Malaysian Financial Reporting Standards (MFRS)

17.

Multiple Choice

30 sec

1 pt

Agency contract in which a party mandates another party as his agent to perform a particular task is

Wakalah

Wadiah

Tawarruq

Wa’d

18.

Multiple Choice

30 sec

1 pt

Which refer to a loan contract?

Wakalah

Qard

Rahn

Ta’widh

19.

Multiple Select

45 sec

1 pt

Which of the following is the pillars of Wakalah?

Agent

Share partners

Capital

Principal

20.

Multiple Choice

30 sec

1 pt

_______ is a unilateral promise which refers to an expression of commitment given by one party to another to perform certain action(s) in the future.

Hibah

Kafalah

Wa’ad

Wadiah

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