Overall View of the Malaysian Experience in the Islamic Banking

Abstract

      Islamic Banking in Malaysia is fully supported by the Malaysian Government in order to make Malaysia an international center for Islamic finance. The efforts made include many steps such as Shari’a structure, regulatory frameworks and necessary legislations. In addition, many initiatives are taken in terms of establishing facilities and institutes, creating products and providing necessary services to enhance the development of this sector. A dual banking system which combines the Islamic and traditional banking is adopted by taking into account the privacy that characterizes the Islamic banking system. This led to promote the competition and improve the efficiency of the Islamic banking system. In fact, depending on jurisprudential modes and independent opinions which are not supported by the Fiqh Academies, decreased the attractiveness of such industry and questioned the possibility of considering it as a typical experience that reflects the core of Islamic banking despite the success of the experience in many aspects. The availability of infrastructure and success opportunities for that industry may lead it to be internationally discriminated. Thus, ensuring more compliance with internationally acceptable standards of Shari’a is required to set Malaysia as an international Islamic finance center.