ISSN: 2222-6990
Open access
This article delineates the concept of Shari??h non-compliant events (SNEs) in Malaysian Islamic Banks, its determinants and treatments from the Islamic perspective based on Muslim scholars' discussion. This research is qualitative, and it utilises textual analysis technique in analysing the data. Its findings argue that SNEs occur in almost all Malaysian Islamic Banks due to factors like human errors and pressing needs. Furthermore, the research reveals that the treatment undertaken by the banks is rectification and re-execution but different from one Islamic bank to another. This article argues that the existing approach to SNEs could be improved, enriched and possibly standardised.
AAOIFI. (2010). Shari’a Standards for Islamic Financial Institutions. Bahrain: Accounting and Auditing Organization for Islamic Financial Institutions.
Hidayat, A. B. (2000). Studies in the Islamic Law of contracts: The prohibition of gharar. Kuala Lumpur: International Law Book Service.
Al-Dhareer, Siddiq. Mohammad. Al-Ameen. (1997). Al Gharar in contracts and its effect on contemporary transaction. Saudi Arabia: Islamic Research and Training Institute and Islamic Development Bank, 58–59.
Al-Kasani, A. ddin A. B. M. (1986). Kit?b Bad?i? Al-San?i?u f? Tart?b Al-Shar?i?. Bair?t: D?r Al-Kutub Al-?ilmiyyah.
Al-K?s?n?, Ab? Bakr Mas??d ibn A?mad. (2005). Bad?i?Al-?an?i’ f? Tart?b Al-?har?i?. Al-Q?hirah: D?r al-?ad?th, 5, 305.
Asyraf Wajdi, D., Mohammad Mahbubi, A., & Lokmanulhakim, H. (2012). A framework for Islamic Financial Institution to deal with Shariah non-compliant transaction”. ISRA Research Paper, 42.
BIMB. (2012). BIMB Annual Report. Kuala Lumpur: Bank Islam Malaysia Berhad.
BNM. (2020). Guidelines of introduction of new product. Accessed month January, 2020. https://www.bnm.gov.my/guidelines/01_banking/04_prudential_stds/11_guidelines_introduction_new_products_2014.pdf
BNM. (2010). Shariah Governance Framework for Islamic Finance Institutions, Kuala Lumpur: Bank Negara Malaysia, p. 17. Accessed month January 2020. https://www.bnm.gov.my/guidelines_old/05_shariah/02_Shariah_Governance_Framework_20101026.pdf.
El-Gamal, M. A. (1999). Involving Islamic Banks in Central Bank Open Market Operations. The International Journal of Accounting, 41 (4/5), 501-502.
IBFIM. (2006). Workshop on legal documentation for Islamic Consumer Banking. Kuala Lumpur: Islamic Banking and Finance Institute Malaysia Sdn Bhd..
Tahir, M. (2007). Islamic Law of contracts and business transactions. New Delhi: Adam Publishers and Distributors.
Islamic Financial Services Act 2013.
Islamic Banking Act 1983, Pub. L. No. Act 276. (1983). Malaysia. Retrieved from http://www.bnm.gov.my/documents/act/en_ib_act.pdf.
Omar, H. N., & Hassan, R. (2019). Shariah non-compliance treatment in Malaysian Islamic Banks. International Journal of Management and Applied Research, 6 (4), 220-233.
Azhar, S. R. (2010). Shariah parameters reconsidered. International Journal of Islamic and Middle Eastern Finance and Management 3 (2), 132–146.
Vejzagic, M. (2012). Future contracts: Islamic Contract Law perspectives. Paper presented at the 5th Islamic Banking, Accounting and Finance Conference 2012 (iBAF, 2012) at the Faculty of Economics and Muamalat (FEM), Universiti Sains Islam Malaysia, October 2-3, 2012. Peer Reviewed Paper, 10–11.
Zulkifli, H. (2004). A Shariah perspective on the ‘Letter of Offer’ as practiced by the Islamic Financial Institutions: A comparative study with the Malaysian Law of Contract, Malaysian Journal of Shari’ah and Law, 1 (1), 56–69.
Interview
Maybank, Interview by Naimah Nasir. Personal Interview. Dataran Maybank, KL December 17,2019.
BIMB. Interview by Naimah Nasir. Personal Interview. Menara Bank Islam, KL, December 31,2019.
BMMB. Interview by Naimah Nasir. Interview by email. January 8, 2020.
Hong Leong Islamic, Interview by Naimah Nasir. Personal Interview. Bukit Damansara, KL, January 17,2020.
CIMB Islamic, Interview by Naimah Nasir. Personal Interview. Menara Bumiputra Commerce, KL, January 22,2020.
MBSB Bank, Interview by Naimah Nasir. Personal Interview. Starbucks, KL, February 5, 2020.
Saadiq Standard Chartered. Interview by Naimah Nasir. Personal Interview. Equatorial Plaza, KL, January 7, 2020.
In-Text Citation: (Yunus et al., 2023)
To Cite this Article: Yunus, S. M., Noor, A. M., Kamaruddin, Z., & Embong, R. (2023). The Determinants and Treatments of Shariah Non-Compliant Events in Malaysian Islamic Banks. International Journal of Academic Research in Business & Social Sciences, 13(7), 710 – 728.
Copyright: © 2023 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode