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MALAYSIA
CHAPTER 6
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OBJECTIVES
By end of this chapter student must be able to:
1. Interpret the Islamic Banking concept
2. Explain the need for Islamic Banking in the
financial system
3. Describe the Islamic financial instrument the are
available in Malaysia
4. Compare Islamic banking system to conventional
banking system
5. Explain the implementation of Islamic banking in
Malaysia
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GENERAL OBJECTIVE
To implement the
economic and
1 financial principles
of Islam in the
banking industry.
To spread
economic
2 prosperity within
the framework of
Islam.
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You can identify an Islamic bank or an IBS bank from the logo
below:
All banking institutions that provide Islamic banking products and services
in banking logo as shown above. Malaysia are required to display the
Islamic
3.
Conventional banking
Full-fledged Islamic banks
Conventional banks operating Islamic banking windows
under the Islamic banking scheme (IBS)
Local
1.
2.
3.
4.
5.
6.
7.
Foreign
1.
2.
3.
Commercial Banks
1. Alliance Bank Malaysia Berhad
2. AmBank (M) Berhad
3. Citibank Berhad
4. HSBC Bank Malaysia Berhad
5. Malayan Banking Berhad
6. OCBC Bank (Malaysia) Berhad
7. Public Bank Berhad
8. Southern Bank Berhad
9. Standard Chartered Bank Malaysia Berhad
Merchant Banks
1. Affin Merchant Bank Berhad
2. Alliance Merchant Bank Berhad
3. AmMerchant Bank Berhad
4. Commerce International Merchant Bankers Berhad
Discount Houses
1.
2.
3.
4.
5.
6.
Bank
Bank
Bank
Bank
Bank
LIBERALISATION in IBF:
Islamic
finance.
Islamic finance encompasses a wide range of products
comparable to mainstream banking products
Government liberalization allows foreign entity to own
local Islamic banks up to 70%, provided the paid up capital
is increased to USD1 bil this will scale up operations
and expand into global markets
Malaysia:
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GOVERNANCE BODIES
Local
International level
IFSB - Islamic Financial Services Board (IFSB)
AAOIFI - The Accounting and Auditing
Organisation for Islamic Financial Institutions
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Muslims throughout the world not been able to avoid interestbased transactions which cover almost all aspects of their lives.
An alternatively banking system which free-interest payment is
necessary in Islamic countries to carter the demand of Muslim
customers.
Muslims now realize how important Islamic way in daily activities
especially in Islamic transaction
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Prohibition : RIBA
The Holy Quran has clear instructions regarding business and trading
activities as earnings from trade (Bai) is halal but interest (Riba) based
activities are Haraam.
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Prohibition : RIBA
Riba An-Nasiah:
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Prohibition : RIBA
Riba Al-Fadl:
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Prohibition : RIBA
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RIBA vs PROFIT
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1.
2.
3.
4.
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Prohibition : GHARAR
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For example:
Sale of birds in the air
Sale of fish still in the sea
Sale of unborn animal
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Prohibition : GHARAR
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Prohibition : MAISIR
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Prohibition : MAISIR
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Prohibition : MAISIR
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CONTINUE
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ADDITIONAL
INFO
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