Islamic banking in Malaysia: Unchartered waters

Mohamed Ariff, Saiful Azhar Rosly

Research output: Contribution to journalArticleResearchpeer-review

20 Citations (Scopus)

Abstract

This paper explores the Islamic banking business in Malaysia since its beginning in 1983. The Islamic banking sector has achieved its target of 20% market share in assets and deposits in 2010. To boost the industry's competitiveness and efficiency, the demands of the market forces will have to be delicately balanced with the dictates of the Shari'ah. The search for niche Islamic banking products warrants enhancements in the current regulatory, legal, and fiscal infrastructure for Islamic banking, without which these products cannot be a viable alternative to the conventional ones. While the prevailing infrastructure is conducive to Islamic banking products that hold similar characteristics with interest-bearing loans, Shari'ah compliance can be a futile exercise when the purpose of the law (maqasid al-shari'ah) is overlooked, for there is much more to Islamic banking than the elimination of interest.

Original languageEnglish
Pages (from-to)301-319
Number of pages19
JournalAsian Economic Policy Review
Volume6
Issue number2
DOIs
Publication statusPublished - Dec 2011
Externally publishedYes

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banking
Malaysia
water
infrastructure
market
market share
competitiveness
loan
compliance
Water
Islamic banking
niche
assets
efficiency
Law
industry
product

Cite this

Ariff, Mohamed ; Rosly, Saiful Azhar. / Islamic banking in Malaysia : Unchartered waters. In: Asian Economic Policy Review. 2011 ; Vol. 6, No. 2. pp. 301-319.
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Islamic banking in Malaysia : Unchartered waters. / Ariff, Mohamed; Rosly, Saiful Azhar.

In: Asian Economic Policy Review, Vol. 6, No. 2, 12.2011, p. 301-319.

Research output: Contribution to journalArticleResearchpeer-review

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