ISSN: 2222-6990
Open access
Free-riba Islamic muamalat transactions have been practiced in Malaysia since the 7th century in line with the advent of Islam. Officially, it was enforced in the law of Malacca in the 16th century. Among the Islamic muamalat transactions that were practiced is bay' al-wafa' or known as conditional sale. After Malaysia was colonized, the conventional banking system was established until it became the mainstream system. The success of Islamic banking in other Islamic countries and the Lembaga Urusan Tabung Haji (LUTH) has led the Muslim community to demand Islamic banking in Malaysia. However, the establishment of Islamic banking in Malaysia was not as comfortable as it was necessary to compete with long-established conventional banks. Hence, this paper is to study the history and establishment of Islamic banking in Malaysia. This study uses a qualitative method where the data are derived from literature studies, i.e. referring to secondary sources such as books and journals. The data collected were analyzed using document and content analysis methods based on the objective. The study found that the success of the establishment of LUTH and Islamic banks in the Middle East has resulted in the Malaysian community demanding to set up Islamic banking in Malaysia and the government welcomed it. The findings also found that the success of Islamic banking in Malaysia was the result of the government's initiative in introducing Islamic banking schemes (IBS) or known as (SKIM PERBANKAN ISLAM SPI) to becoming the mainstream schemes in Malaysia despite having to compete with long-established conventional banks. The study found that the development of Islamic banking was drastically due to the inherent privilege of the Islamic banking scheme, where there was an element of profit sharing and loss in every banking transaction between the bank and the customer, which was different from conventional banking scheme.
Abdullah, A. R. H. (1989). Islam dalam sejarah Asia Tenggara tradisional. Kuala Lumpur: Penerbitan Pena.
Al-Sabuni, A. (1980). al-Madkhal li Dirasah al-Tasyri’ al-Islami. Dimasyq: Matba’ah al-Riyad.
Al-Su'ud, M. (1968). Khutut Ra'isiyyah fi al-Iqtisad al-Islami. Kuwait: Maktabah al-Manar al-Islamiyyah.
Alwi, S. F. S., Jaafar, M. N., Osman, I., & Afif, A. (2019). The Development of Islamic Trade Finance in Malaysia: From the Bankers’ Perspectives. In Contemporary Management and Science Issues in the Halal Industry (pp. 461-467). Springer, Singapore.
Al-Zarqa’, M. (1968). Sharh al-Qanun al-Suri, al-‘Uqud al-Musawamah. Dimasyq: Dar al-Kitab.
Amin, H. (2008). Choice criteria for Islamic home financing: empirical investigation among Malaysian bank customers. International Journal of Housing Markets and Analysis, 1(3), 256-274.
BIMB. (1984). Bank Islam : Penubuhan dan Operasi. Kuala Lumpur: Usaha C & Sdn. Bhd.
BNM. (2019). Islamic Banks. See:
http://www.bnm.gov.my/index.php?ch=li&cat=islamic&type=IB&fund=0&cu=0 (accessed on 23/5/2019).
Borhan, J. T. (2001). Sistem Perbankan Islam di Malaysia: Sejarah Perkembangan, Prinsip dan Amalannya. Jurnal Usuluddin, 14, 137-164.
Borhan, J. T., & Sa'ari, C. Z. (2005). THE ROLE OF TABUNG HAJI AS A DEPOSIT MOBILIZER OF MUSLIMS IN MALAYSIA, 1969-1990. A HISTORICAL APPROACH. Journal of Al-Tamaddun, 1(1), 215-234.
Buang, S. (1988). Ke Arah Pengislaman Kanun Tanah Negara. in Fakulti Undang-undang Universiti Malaya. Makalah Undang-undang Menghormati Ahmad Ibrahim. Kuala Lumpur: Dewan Bahasa dan Pustaka.
Buang, S. (1993). Undang-undang tanah di Malaysia. Kuala Lumpur: Dewan Bahasa dan Pustaka.
Chapra, M. U. (1985). Towards a just monetary system (Vol. 8). International Institute of Islamic Thought (IIIT).
Cortesa, A (1944). The Suma Oriental of Tom Pires. London: E.G.De Eredia.
Fang, L. Y. (1976). Undang-Undang Melaka. The Hague: Martinus Nijhoff
Ghani, A. M. A. (1997). Sistem kewangan Islam dan pelaksanaannya di Malaysia (Doctoral dissertation, Jabatan Pengajian Islam, Fakulti Sastera dan Sains Sosial, Universiti Malaya).
Ghani, A. M. A., (1999). Sistem kewangan Islam dan pelaksanaannya di Malaysia. Kuala Lumpur: Jabatan kemajuan Islam Malaysia.
Guan, C. K. (2002). Sistem Kewangan Malaysia : Struktur, Perkembangan dan Perubahan (Second Edition). Kuala Lumpur: Pearson Malaysia SDN. BHD (4409-W).
Gullick, J. M. (1987). Malay society in the late nineteenth century: The beginnings of change. USA; Oxford University Press.
Haron, S. (1997). Islamic Banking System: Concept & Applications. Kuala Lumpur: Pelanduk Publications (M).
Haron, S. (2008). Sistem Kewangan dan Perbankan Islam, Kuala Lumpur: Kuala Lumpur Business School.
Hassan, A. A. H. (2005). Teori dan aplikasi kontemporari sistem ekonomi Islam di Malaysia. Kuala Lumpur: Utusan Publications.
Hawwa, A. S. (2007). Suwar al-Tahayul ‘ala al-Riba. Beirut: Dar Ibn Hazm.
Hooker, M. B. (1970). Readings in Malay adat laws. Ohio University Press.
Ismail, A. H. (1983). Bank Islam Malaysia Berhad: Establishment and Operation. Proceeding Paper at International Conference on Islam and Technology, UTM, Kuala Lumpur, Dec. 1983.
Kahf, M. (1978). The Islamic Economy: An Analytical Study of the Functioning of the Islamic Economic System. Indiana: Muslim Students' Association.
Majma’ al-Fiqh al-Islami. (1992). Qarar bisya’n bay’ al-wafa’. See: http://www.iifa-aifi.org/1855.html (Accessed on 25/5/2019)
Malik, N. (1972). al-Muslim fi 'Alam al-Iqtisad. Beirut: Dar al-Shuruq.
Maxwell, W. E. (1884). THE LAW AND CUSTOMS OE THE MALAYS WITH REFERENCE TO THE TENURE OF LAND. Readings in Malay Adat Laws, 345.
MBSB. (2019). Company Profile. See: https://www.mbsbbank.com/corporate_about_profile.html (accessed on 20/5/2019)
Nasohah, Z. (2004). Pentadbiran undang-undang Islam di Malaysia: sebelum dan menjelang merdeka. Kuala Lumpur: Utusan Publications.
Samuelson, P. A. (1977). Economics. New York: McGraw-Hill Book Co.
Shamsuddin, A. K. (1988). Ban
In-Text Citation: (Asni, 2019)
To Cite this Article: Asni, F. (2019). History of the Establishment and Development of Islamic Banking in Malaysia. International Journal of Academic Research in Business and Social Sciences, 9(6), 305–315.
Copyright: © 2019 The Author(s)
Published by Human Resource Management Academic Research Society (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