Islamic banking in Malaysia began in September 1963 when Perbadanan Wang Simpanan Bakal-Bakal Haji (PWSBH) was established. PWSBH was set up as an institution for

Muslims Muslims ( ar, المسلمون, , ) are people who adhere to Islam, a monotheistic religion belonging to the Abrahamic tradition. They consider the Quran, the foundational religious text of Islam, to be the verbatim word of the God of Abrah ...

to save for their Hajj (pilgrimage to

Mecca Mecca (; officially Makkah al-Mukarramah, commonly shortened to Makkah ()) is a city and administrative center of the Mecca Province of Saudi Arabia, and the holiest city in Islam. It is inland from Jeddah on the Red Sea, in a narrow ...

) expenses. In 1969, PWSBH merged with Pejabat Urusan Haji to form Lembaga Urusan dan Tabung Haji (now known as Lembaga Tabung Haji). The first

Islamic bank Islamic banking, Islamic finance ( ar, مصرفية إسلامية), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economic ...

Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...

was established in 1983. In 1993,

commercial bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with co ...

s, merchant banks and finance companies were allowed to offer Islamic banking products and services under the Islamic Banking Scheme (IBS). These institutions however, are required to separate the funds and activities of Islamic banking transactions from that of the conventional banking business to ensure that there would not be any co-mingling of funds. The list of banks in Malaysia offering Islamic products (updated in 2015) have grown to 16 banks. Apart from banks, other non-banks intermediaries offering syariah based products are Malaysia Building Society Berhad (MBSB) and cooperatives registered under the Cooperative Commission of Malaysia (SKM). In Malaysia, the National Shariah Advisory Council additionally set up at Bank Negara Malaysia (BNM) advises BNM on the

Shariah Sharia (; ar, شريعة, sharīʿa ) is a body of religious law that forms a part of the Islamic tradition. It is derived from the religious precepts of Islam and is based on the sacred scriptures of Islam, particularly the Quran and the ...

aspects of the operations of these institutions, as well as on their products and services. In 2006, Bank Negara Malaysia setup

International Centre for Education in Islamic Finance INCEIF UNIVERSITY was set up by Bank Negara Malaysia (Central Bank of Malaysia) in 2005 to develop human capital for the global Islamic finance industry. Commonly known as INCEIF – The Global University of Islamic Finance, it is the only univ ...

( INCEIF) a dedicated University to provide skilled and certified personnel for Islamic Finance in Malaysia. The university was established as part of the Malaysian Government's initiative to further strengthen the country’s position as an international Islamic finance centre. It is the only university in the world that is wholly dedicated to postgraduate study in Islamic Finance. In June 2005,

Dow Jones and Company Dow Jones & Company, Inc. is an American publishing firm owned by News Corp and led by CEO Almar Latour. The company publishes ''The Wall Street Journal'', ''Barron's'', '' MarketWatch'', ''Mansion Global'', ''Financial News'' and '' Private ...

New York City New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the Un ...

and RHB Securities of

Kuala Lumpur , anthem = ''Maju dan Sejahtera'' , image_map = , map_caption = , pushpin_map = Malaysia#Southeast Asia#Asia , pushpin_map_caption = , coordinates = , sub ...

, teamed up to launch a new "Islamic Malaysia Index" — a collection of 45 stocks representing Malaysian companies that comply with a variety of Sharia-based criteria. Three variables (the total debt of an indexed company, its total cash plus interest-bearing securities and its accounts receivables) must each be less than 33% of the trailing 12-month average capitalization, for example.

References

External links

World Database for Islamic Banking and Finance
{{Economy of Malaysia Banking in Malaysia

Banking A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Becau ...

See also

References

External links