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 to the public. In order to participate, financial institutions must separate their accounts from the conventional banking business and appoint Syariah 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; unless there is a strong reason to suspect that the money to be deposited originates from businesses or activities that are non-Syariah compliant. Islamic financing may also be extended to individuals on the same basis, unless again there is a strong reason to suspect that the proceeds from the financing will end up supporting businesses or activities that are non-Syariah compliant.
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 non-Syariah compliant.
Non-Syariah Compliant Businesses and Activities (Negative list)
- Alcohol
- Gambling
- Pornography
- Tobacco and dangerous drugs
- Entertainment related companies – those proven to engage in specifically in non-Syariah 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 – in particular those suspected of condoning to haram activities, and etc
- Production and distribution of idols, statues, and materials and place for worshipping other than Allah Almighty
- For restaurants, a halal certificate from JAKIM is preferred but not required. Facilities can be extended to restaurants not serving pork and alcohol.
- For companies in the beauty related industry, accounts are to be referred to the Syariah 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 non-Syariah 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.
