Professional Documents
Culture Documents
Given the forces of change happening worldwide, it is crucial to strengthen the legal
framework for the Islamic financial industry. In a timely rejoinder to the global
Islamic finance, Malaysia needs to develop a legal framework for Islamic finance that
is “internationally facilitative."
A legal framework which is aligned with market developments would provide more
certainty and predictability to financial transactions and innovations, thus instills
public confidence. Islamic Banking Act (IBA) 1983 should be revised, in order to
take into consideration of divergent characteristics of Islamic banking. It is important
to address specific elements that could result in a comparative disadvantage to the
industry.
In addition, BAFIA needs modifications to accommodate the unique features to the
requirements of Islamic finance in order to ensure neutrality of treatment. It should
be further regulated to ensure that the risk management profile of the banking
institutions is in-line with Islamic banking operations.
Islamic banking and finance must be matched correspondently with Syariah opinions,
to promote market development. The regulatory framework for Islamic banking needs
development by introducing a separate capital adequacy, statutory reserve and
liquidity requirement for both Islamic banks and IBS banks. ***further explains
The sustainable growth of Islamic economic and financial development will depend
on the availability of professional talent to meet the diverse needs of the industry,
especially to facilitate product innovation, research and development, and Shariah
jurisdiction. Therefore, it is vital to increase the pool of bankers and takaful operators,
as well as enhance their knowledge and competency.
Such an institution should also take up the responsibility to create and increase
awareness amongst the public on the concept and benefits of Islamic banking and
takaful, on top of customer education on misperceptions. All these could be achieved
by encouraging Islamic banking industry to embark on regular promotional
programmes on Islamic financial products and services. Islamic banking industry
should be encouraged to form strategic coalition with tertiary education, sequentially
to improve knowledge on Islamic banking and services.