Challenges Faced By Islamic Banking In Malaysia

The widely held expectation that this superior growth record will continue is understandable given that approximately one sixth of the world s population is muslim most of which is based in the middle east and asia.

Challenges faced by islamic banking in malaysia. One study of which modes of islamic finance were used most frequently found pls financing in leading islamic banks had declined from 17 34 in 1994 6 to. Islamic banks at least in saudi arabia and egypt have departed from using profit loss sharing techniques as a core principle of islamic banking according to a 2006 dissertation by suliman hamdan albalawi malaysia has also seen a decline. It has tremendous potential to grow further in future. However an examination of islamic banks and the wider industry raises a number of issues.

Pure play islamic banks and financial institutions manage over 250 billion of assets and a further 200 300 billion is managed by the islamic windows and subsidiaries of international banks. Islamic banking and finance in malaysia system issues and challenges sep 04 2020 posted by georges simenon ltd text id 26897dc3 online pdf ebook epub library islamic banking and finance ii highlights various studies on fast growing islamic finance industry it focuses specifically on islamic banking and islamic capital market. The share of islamic banking assets in the banking sector as of 31 december 2008 expanded to 17 4 of the total banking assets of the malaysian financial system as compared to 6 9 percent in the year 2000. Malaysia has recorded 17 3 growth of islamic finances market between 2009 2014 mifc 2015a.

Before going into the discussion of issues following is a general overview which can cause some of the issues. Is the legal system becomes the challenge of developing islamic banking and financial institutions in malaysia. Malaysia s islamic banking assets reached usd 65 6 billion with an average growth rate of 18 20 annually abdul razak 2011. According to ram ratings malaysia was the top sukuk issuer with us 13 9 bil ringgit equivalent or 35 1 of the us 39 5 bil ringgit equivalent sukuk issued in the first quarter ended march 31 2019.

The islamic finance industry in malaysia is characterised by having comprehensive market components ranging from islamic banking takaful islamic money market and islamic capital market. The islamic banking industry has grown rapidly over the last few years.