Islamic Financial Services Act 2013 (IFSA 2013)
- IFSA 2013 consolidates the Islamic Banking Act 1983 and the Takaful Act 1984.
- IFSA 2013 emphasises on governance framework for an end-to-end Shariah compliance in all aspects of regulation and supervision, from licensing to the winding up.
- For purposes of advising the Bank in ensuring its business, affairs and activities comply with Shariah, Shariah Committee is established to perform such functions:
- Responsible & accountable for decisions, views & opinion on Shariah matters
- Perform oversight role
- Disclosure in annual report state of compliance
Serving Individual Customers
- Deposits can be accepted from individuals regardless of their faith, occupation, gender or race. Islamic financing may also be extended to individuals on the same basis.
Serving Business Customers
- For business customers, dealings both in terms of accepting deposit and extending financing must exclude those businesses whose primary activity or activities are Shariah non-compliant.
Negative list – list of non-Shariah compliant activities;
- Alcohol
- Gambling
- Pornography
- Tobacco, dangerous drugs and any prohibited element/potion by government
- Entertainment related companies – those proven to engage in specifically in non-Shariah
- compliant activities. Examples are karaoke lounges serving alcohol, film production
- houses producing mainly illicit movies, cinemas with no evidence of screening films other
- than entertainment related movies.
- Pork and all its by products
- Prostitution
- Interest-based lending
- Conventional insurance and stock brokering
- Hotel – those suspected of condoning to haram activities, and etc.
- Production and distribution of idols, statues, and materials and place for non-Muslim worship.
- For Food & Beverages, a halal certificate from JAKIM is preferred but not required. Facilities can be extended to restaurants not serving pork, alcohol and non-halal ingredients.
- For companies in the beauty related industry, application is to be referred to the Shariah Department for clearance.
Notes:
- The Shariah Committee reserves the rights to add or update the list from time to time.
- The Shariah Committee may grant exceptions to the list, depending on the case-to-case basis.
- The Shariah Committee through its Secretary should be referred when in doubt about the above list.
The list of Shariah non-compliant companies issued by the Securities Commission will be used to supplement the negative list for Malaysian public listed companies.
Asset Financing
Islamic Banking offers a comprehensive range of asset-financing products and services in order to meet customer’s demand of Shariah compliance.
Deposit products
- Deposit from companies which main activities are listed in the above negative list must not be accepted.
Financing products
- For all Islamic financing products, companies which main activities are listed in the negative list must be avoided.
- For all Islamic financing products, proposal to finance assets which have specific purposes which are Shariah non-compliant are not permitted. For example, proposals to finance brewery, cigarette factory, vape, pub, pigsty, casino, synagogue and etc