Diversification of Islamic Financial Insturments
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to that, there are other guidelines and standards issued by Bank Negara Malaysia (BNM) and
Securities Commission Malaysia (SC). As for the International multilateral organization based
in Malaysia, it is represented by Islamic Financial Services Board (IFSB) and International
Islamic Liquidity Management (IILM) As for the Promotion initiative for Islamic finance, it is
represented by Malaysia Islamic Financial Centre (MIFC) and Market place. As for the talent
development segment it is represented by International Centre for Education in Islamic
Finance (INCEIF), Islamic Shariah Research Academy (ISRA), Islamic Banking and Finance
Institutions Malaysia (IBFIM), Finance Accreditation Agency (FAA), Securities Industry
Development Corporation (SIDC), Leadership and Governance Centre (ICLIF), Asia Institute of
Finance (AIF), Financial Sector Talent Enrichment Programme (FSTEP) and others. As for the
market representation it is represented by different institutions and association such as
Association of Islamic banking Institutions Malaysia (IBIM), Malaysia Takaful Association
(MTA), Chartered Institute of Islamic Finance (CIIF), Association of Shariah Advisors Malaysia
(ASAS), Malaysian Financial Planning Council (MFPC), Association of Financial Advisors (AFA),
and others, the above market players contribute significantly in different ways to Islamic
finance industry but all together heading to the same objectives and goals., that creates a
comprehensive eco-system for Islamic finance in Malaysia.
3.8.3 ISLAMIC BANKING IN MALAYSIA
There is a wide range of products and instruments offered in the Islamic finance market,
ranging from banking deposit, financing, trade financing, Islamic capital market products and
Takaful. As for the Islamic banking segment below table showed the most popular products in
deposit and financing offered by the Islamic banks, the tables highlighted both the products
with their underlying Shariah contracts.
Table 60: Deposit Products
Type of Account Principle / Contract
Current Accounts
Qard
Commodity Murabahah/ Tawarruq
Investment Accounts
Mudarabah (profir sharing)
Wakala (agency)
Musyarakah (profit and loss sharing)
Fixed Income Deposit Account Commodity Murabahah/Tawarruq
Source: Created by Author
Table 61: Financing Product
Products Principles of Shariah
House Financing (asset financing)
Commodity Murabahah/ Tawarruq
Istisna (parallel istisna)
Ijarah Muntahiya Bittamleek
Musharakah Mutanaqisah
Vehicle Financing (asset financing)
Murabahah
Ijarah Muntahiya Bittamleek/
Ijarah Thumma al-Bay’
Working Capital Financing
(asset or cash financing)
Commodity Murabahah/Tawarruq
Ijarah Muntahiya Bittamleek/Ijarah Thumma al-Bay’
Tawarruq