𝐇𝐨𝐰 𝐒𝐤𝐢𝐦 𝐏𝐞𝐫𝐛𝐚𝐧𝐤𝐚𝐧 𝐈𝐬𝐥𝐚𝐦 𝐨𝐩𝐞𝐫𝐚𝐭𝐞𝐬?
Financial institutions in Malaysia are required to obtain permission from Bank Negara Malaysia to participate in Skim Perbankan Islam before they can offer Islamic banking products and services to the public. In order to participate, financial institutions must separate their accounts from the conventional banking business and appoint Shariah consultants to advise them on all aspects of the Islamic banking business.
At Standard Chartered, we keep a separate balance sheet for our Islamic banking business to ensure that the deposit accepted under Skim Perbankan Islam is used exclusively to invest in Islamic Banking assets. Similarly, to ensure all Islamic financing are funded by Islamic deposit.
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 byproducts
- 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.
𝗔𝘀𝘀𝗲𝘁 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴
Islamic banking offers a wide range of asset-financing products that extend a financing facility to help customers buy or lease a property, vehicles, goods and etc. In these cases, the assets involved and the company must not fall within the above Shariah non-compliant businesses and activities.
Examples:
We are prohibited from providing an Islamic banking financing facility for the purchase or leasing of a brewery or a synagogue etc.
We are also prohibited from providing an Islamic banking facility to finance the purchase of a vehicle that will be used to facilitate vice, or a machine that is used to produce pork-related products etc.
Finally, we are also prohibited from providing an Islamic banking facility to finance a vehicle or machinery that will be used in a casino or a pornographic film outfit.
