Islamic Banking In Malaysia Article

Kuala lumpur oct 20 malaysia s islamic banking sector registered a capital adequacy ratio of 17 7 per cent in fourth quarter q4 2019 the highest for the year according to the islamic financial services board ifsb.

Islamic banking in malaysia article. Picture by hari anggara. More specifically the paper examines the impact of islamic banking on the market share of conventional banking and the latter s. In 2008 islamic banking accounted for 7 1 per cent of malaysia s financial sector. Lo leow 2014 and the first ever fully fledged islamic bank was established in 1983 offering islamic banking.

With the introduction of value based intermediation vbi by bank negara malaysia bnm in 2017 the association of islamic banking and financial institutions malaysia aibim is confident the central bank s target for the local islamic banking industry to have 40 market share in total banking assets by 2020 is achievable. By early 2000 most of the local commercial banks had implemented the syari ah law as a window of their islamic banking products. Malaysia s determination to become a hub for islamic banking in southeast asia has led the central bank of malaysia to grant licenses to foreign islamic banks to operate in the country. Malaysia in 1983 with the first islamic bank called bank islam.

And malaysia has become a leader in pushing the frontiers of this space. All of these things contribute to the dependent variable which is adoption of islamic banking in malaysia. Factors influencing adoption of islamic banking in malaysia and these factors will be called the independent variable in this study and they include compatibility customer awareness risk perception and consumer knowledge. The growth of islamic banking in malaysia was more rapid when the government opened the opportunity for foreign islamic banks in malaysia in 1996.

However the changing global environment and regulatory regimes have brought about several challenges. By 2016 that figure had leapt to 28 per cent and the malaysian government hopes to push it over 40 per cent by 2020. This article attempts to study the landscape changes in the islamic banking industry in malaysia and their implications for the future of the industry. This article first appeared in the edge malaysia weekly on december 5 11 2016.

Kuala lumpur sept 25.