HISTORY AND DEVELOPMENT OF ISLAMIC BANKING IN.pptx

 HISTORY AND  DEVELOPMENT OF ISLAMIC BANKING IN   MALAYSIA MUHAMMAD QAYYUM QAYYUM BIN ZAHARI AZAR MIA MAISARAH BINTI MEOR FADZILLAH  MUHAMMAD AMMAR BIN BASARUDDIN  MUHAMMAD EDZRYL SHAH BIN NUR HERMAN 

IN COMPLIANCE WITH IF CONTRARY ,

SYARIAH PRINCIPLES

HARAM ISLAMIC BANKING

GOODS/SERVICES

NO INTERESTS (RIBA) INVOLVED

HALAL

HISTORY OF ISLAMIC BANKING 

ISLAMIC BANKING : WORLD 1963

1971

First Islamic bank  – EGYPT MIT GHAMR by AHMAD EL NAJJAR

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NASSER SOCIAL BANK Interest-free, but no reference to Syariah

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1970s

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Islamic Development Bank Dubai Islamic Bank Faisal Islamic of Sudan

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Faisal Islamic Bank Egypt Bahrain Islamic Bank BIMB

DENMARK

SWITZERLAND

OTHER COUNTRIES INVOLVED 

GUINEA

ISLAMIC BANKING : MALAYSIA 1963

Pilgrim Fund Board (PFB) established

1969

PFB joined with Pilgrim’s Management Fund Board/ Lembaga Urusan & Tabung Haji (LUTH)

1980

Few parties invlolved for establishment of Islamic Banking due to resurgence in Middle East

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1981 •

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1983

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1993 

1997

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National Steering Committee (NSC) undertake, studied all aspects and make recommendations LUTH took the secretarial functions

NSC submitted report to government The first Islamic bank, Bank Islam Malaysia Berhad (BIMB) established under Islamic Banking Act 1983

Interest-Free Banking Scheme (IFSB)/Skim Perbankan Tanpa Faedah (SPTF) launched Other financial institutions begun to offer Islamic products/services under Islamic Banking Scheme

Syariah Advisory Council (SAC) established by Bank Negara Malaysia (BNM)

1998

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1999

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2001

2002

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Interest-Free Banking Scheme replaced with Islamic Banking Scheme

Introduced Bank Muamalat Malaysia (merger between Bank Bumiputera Berhad and Bank of Commerce Berhad)

Financial Sector Master Plan (FSMP) launched by BNM Declaration of Labuan as International Offshore Financial Centre (IOFC)

Establishment of Islamic Financial Services Board (IFSB)

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2004

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TODAY

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Issuance of three (3) Islamic license under Islamic Banking Act 1983, from Middle East to Islamic financial institution

Implemented dual banking system Become the first nation to conduct a full-fledge Islamic system operating alongside co nventional system

TAKAFUL MALAYSIA (INSURANCE) 

TAKAFUL MALAYSIA

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Inspired through the establishment of Bank Islam Malaysia Berhad (BIMB)

1984 •

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1983

The Takaful Act was drafted Takaful Malaysia is established as the pioneer takaful operator in Malaysia

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Takaful Malaysia offering Family Takaful & General Takaful Business

1985

1. Syariah-based 2. Objective is to ensure the activities of company are carried out according to principles of Syariah 3. Accounts used – general insurance account , life insurance account 4. Bonus/profit – may be offered in general terms especially with profit policies. Can be vary within its period

ISLAMIC BANKING V CONVENTIONAL BANKING

ISLAMIC BANKING

CONVENTIONAL BANKING

Syariah-based

Conventional with interest-based

Offers financing (Mudharabah and Musyarakah)

Offer cash loans with extra cash payment (interest)

Mobilizes resources to develop the society, profit is not sole objective

Attract resources and lend them to gain profit

Reviewed by auditors and Syariah Supervisory Board

Review solely by certified auditors

Pay zakat as a religious obligation and tax as required by the government

Only pay tax as required by government

IMPACT / CHALLENGE 

Misconception against Islamic Banking

Lack of Uniformity between Syariah view

Equity-Based Financing (Mudhrabah & Musharakah)

War of Talent Got Fiercer

IMPACT / CHALLENGE

Brand Recognition /Goodwill

Heightened Competition

CURRENT DEVELOPMENT 

ISLAMIC BANKING IS USED BY NON-MUSLIMS

CURRENT DEVELOPMENT

LABUAN INTERNATIONAL OFFSHORE FINANCIAL CENTRE

EFFECTS OF ISLAMIC BANKING TOWARDS MALAYSIANS