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  • Malaysia - Islamic Banking 1983 To 2010

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    The Malaysian Islamic banking industry has grown significantly since 1983 when the first Islamic bank was established. Some key events include the establishment of the National Shariah Advisory Council in 1997 to regulate Islamic banking practices. The industry's assets have also grown substantially, accounting for over 20% of banking assets in recent years. The government has introduced various policies and initiatives to further develop Malaysia as a global Islamic finance hub and promote the growth of the Islamic banking sector.

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    Malaysia_Islamic Banking 1983 to 2010

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    The Malaysian Islamic banking industry has grown significantly since 1983 when the first Islamic bank was established. Some key events include the establishment of the National Shariah Advisory Council in 1997 to regulate Islamic banking practices. The industry's assets have also grown substantially, accounting for over 20% of banking assets in recent years. The government has introduced various policies and initiatives to further develop Malaysia as a global Islamic finance hub and promote the growth of the Islamic banking sector.

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    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    48 views1 page

    Malaysia - Islamic Banking 1983 To 2010

    Uploaded by

    Zusuff
    The Malaysian Islamic banking industry has grown significantly since 1983 when the first Islamic bank was established. Some key events include the establishment of the National Shariah Advisory Council in 1997 to regulate Islamic banking practices. The industry's assets have also grown substantially, accounting for over 20% of banking assets in recent years. The government has introduced various policies and initiatives to further develop Malaysia as a global Islamic finance hub and promote the growth of the Islamic banking sector.

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    of 1

    Chronicle of the Malaysian Islamic banking industry

    18.9 20
    15.4 15.9
    8.9 9.7 10.5 11.7 Islamic banking
    5.5 8.2
    1.5 2.5 assets share in %
    <0.5* 0.8

    1983 1993 1994 1997 1999 2001 2003 2004 2005 2006 2007 2008 2009 2010

    Banks with Allowing 100%


    Islamic banking foreign equity
    windows (under ownership in
    Islamic banking Islamic financial
    scheme) allowed institutions
    Islamic Interbank to convert to established
    Money Market Islamic bank under MIFC
    established

    Government announced International Shariah Research


    National Shariah Advisory tax neutrality policy for Academy (ISRA) which focuses on
    Council (SAC BNM) was Islamic banking and applied shariah research was
    established as the highest finance in the 2005 budget established
    authority on Islamic
    banking and Takaful
    • New Central Bank Act 2009 was introduced.
    • Malaysia International Islamic Financial SAC is now the apex authority on Islamic finance
    Centre (MIFC) initiative was launched to
    Bank Muamalat Malaysia • 2nd Edition of Shariah Resolution was
    promote Malaysia as the global Islamic
    Berhad, the second full- published
    financial hub
    fledged Islamic bank was • Circular on Issuance of Special Employment
    • International Centre for Education in
    established Pass for Islamic Finance Expatriates under the
    Islamic Finance (INCEIF) was established
    MIFC was issued
    • Guidelines on Shariah Governance Framework
    for Islamic Financial Institutions issued and shall
    Islamic Banking Scheme (previously known as • 3 new licenses issued to foreign Islamic banks be effective 1 Jan 2011
    Interest Free Banking Scheme) was introduced, (Kuwait Finance House, Al-Rajhi, Asian Finance
    allowing conventional financial institutions to Bank)
    offer Islamic products & services • Islamic Financial Services Board (IFSB) was
    launched and Malaysia was chosen as its base
    • BNM issued its first Shariah Parameter Reference (SPR) for Murabaha
    •Bursa Suq al-Sila' the world's first shariah compliant commodity trading
    • Islamic Banking Act 1983 platform specifically dedicated to facilitate Islamic liquidity
    • 1st Islamic bank established (Bank Islam Malaysia BNM formed 2 consultative
    committees to set best practice management and financing by Islamic banks
    Berhad) • Foreigners allowed to take up to 70% stake in Islamic banks and takaful
    and drive innovation in Islamic
    • Government Investment Act 1983 enables Islamic operator (previously up to 49%)
    product development
    banks to absorb idle funds in the short run
    Source: Press search; Bank Negara Malaysia, McKinsey and RAM Ratings
    Note: * is an estimate figure

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