ISLAMIC BANKING:
SALIENT FEATURES OF
THE MAIN RELATED ACTS
IZZAH ZAHIN ALIMAN
ISLAMIC FINANCIAL SERVICES ACT
(IFSA) 2013
• Preamble
- date of enforcement 30th June 2013
- 18 parts, 291 sections
- cons...
• Statutory requirements for Licensing of an Islamic Bank
NO SECTIONS REQUIREMENTS
1 S 21(1) IFSA Must be a public company...
Procedure for licensing S 8, 9, 10 IFSA
Statutory duties of Islamic Bank on Shariah
Requirement
S 28(1)(2) IFSA
compliance...
FINANCIAL SERVICES ACT (FSA) 2013
• Repeals (S 271 FSA):
- Banking and Financial Institutions Act 1989
- Exchange Control ...
CENTRAL BANK OF MALAYSIA
ACT (CBMA) 2009
• Repealed & replaced CBMA 1958
• CBMA 1958 provides for the establishment of SAC...
S 59
CBMA 2009
Permits BNM to issue circulars, guidelines, & notices on Shariah
matters that need to be complied to accord...
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Islamic Banking: Salient Features of the Main Related Acts: IFSA 2013, FSA 2013, CBMA 2009

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Islamic Banking: Salient Features of the Main Related Acts: IFSA 2013, FSA 2013, CBMA 2009

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Islamic Banking: Salient Features of the Main Related Acts: IFSA 2013, FSA 2013, CBMA 2009

  1. 1. ISLAMIC BANKING: SALIENT FEATURES OF THE MAIN RELATED ACTS IZZAH ZAHIN ALIMAN
  2. 2. ISLAMIC FINANCIAL SERVICES ACT (IFSA) 2013 • Preamble - date of enforcement 30th June 2013 - 18 parts, 291 sections - consolidated Islamic Banking Act 1983 & Takaful Act 1984, and repealed both • A comprehensive act - section 2-definitions
  3. 3. • Statutory requirements for Licensing of an Islamic Bank NO SECTIONS REQUIREMENTS 1 S 21(1) IFSA Must be a public company 2 S 12(1)(5) IFSA Islamic Financial Services (Minimum Amount of Capital Funds or Surplus of Assets over Liabilities)(Licensed Person) Order 2013 Capital fund or surplus of assets over liabilities must not be less than the amount prescribed by Minister… Penalties…. 3 S 23(1) IFSA Pay fees as prescribed by BNM 4 Sections 10 & 11 IFSA Schedule 5 IFSA Factors for consideration in assessing application for license (s 10) or approval (s 11)
  4. 4. Procedure for licensing S 8, 9, 10 IFSA Statutory duties of Islamic Bank on Shariah Requirement S 28(1)(2) IFSA compliance with shariah = comply with SAC’s rulings S 30(1) establish a Shariah Committee s 28(3) IFSA notify BNM on any non-Shariah compliant actvt, immediately stop, rectify s 29(3)(4) IFSA complies w Shariah standard-BNM specifies-consistent s 28(5) / 29(6) IFSA Penalties for non compliance with Shariah and standards specified by BNM
  5. 5. FINANCIAL SERVICES ACT (FSA) 2013 • Repeals (S 271 FSA): - Banking and Financial Institutions Act 1989 - Exchange Control Act 1953 - Insurance Act 1996 - Payment System Act 2003 • Before FSA, conventional banks participating n Islamic Banking business were governed by s 124 BAFIA • S 15 FSA 2013 provides – approval for a conventional bank (a licensed bank or licensed investment bank) to carry on Islamic Banking Business.
  6. 6. CENTRAL BANK OF MALAYSIA ACT (CBMA) 2009 • Repealed & replaced CBMA 1958 • CBMA 1958 provides for the establishment of SAC – ruling of SAC not binding on the court but on the arbitrator • CBMA 2009 provides for the continued existence of BNM • Dual parallel system – existence of Islamic financial system in Malaysia is paralleled with the Conventional
  7. 7. S 59 CBMA 2009 Permits BNM to issue circulars, guidelines, & notices on Shariah matters that need to be complied to accordingly by the Islamic Banks. S 60 CBMA 2009 Mandatory duty of BNM to promote Malaysia as an international financial centre S 73 CBMA 2009 BNM has to ensure its functions , business or affairs in compliant with Shariah S 74 CBMA 2009 In carrying out such activities, BNM is allowed to purchase, acquire or lease immovable property

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