Council tightlipped over decision on PTPTN interest
Mon Mar 11th, 2002
Yap Mun Ching,Malaysiakini
National Fatwa Council today said it has decided on the validity
of the four percent interest charged on higher education loan
repayments but will keep the decision confidential pending
discussions with the loan provider.
Council’s chairperson Dr Ismail Ibrahim said the result of
discussions among member mufti (religious leaders) will be
shared with National Higher Education Loan Fund (PTPTN) officials
at the earliest opportunity.
law says that a loan can be associated with a true service
cost,” said Ismail during a press conference at Pusat Islam
Malaysia in Kuala Lumpur.
he said it was uncertain if the four percent was the actual
service cost of the PTPTN or whether it incorporated a premium
do not know if this is entire service charge since the loan
capital varies,” he added.
law forbids the charging of interest as a form of income.
However, creditors are permitted to use the concept of ‘interest’
to recoup administration and service costs.
and administrative costs
contacted, assistant manager of PTPTN’s Collection Unit Abdul
Murat Abdul Wahab said the ‘interest’ was intended to cover
service and administrative costs.
said the interest charged had always been applicable to all
loans since the fund’s inception.
was stated in our Act and those accepting loans were aware
of the interest conditions,” he said.
added the fund differs from other Islamic loan schemes which
are assessed based on different methods.
PTPTN was set up in July 1997 to provide financial assistance
to students at local universities.
fund disburses between RM6,500 to RM20,000 per year to students
who qualify depending on their subject of study.
recent years, several student organisations have protested
against the imposition of the interest which they feel is
too high and burdening.
an unrelated matter, the National Fatwa Council said the practice
of human cloning was haram (forbidden) under the Islamic law.
are 11 scriptures in the Quran which state that man is the
result of husband and wife relations,” said Ismail.
added human cloning is opposed to the religious concept of
human existence as it was not the result of sexual relations.
also drew distinctions between the council’s views with regard
to cloning and artificial insemination.
is different from a test tube baby because (the latter) results
from a sperm and an egg originating from married couples,”