DEVELOPMENT OF THE LEGAL AND SHARI’AH FRAMEWORKS

As can be seen from the foregoing discussion, the legal framework regarding Islamic banking business in Malaysia still needs to be revised and modified. It is also observed that the law governed the Islamic banking is not in step with the rapid development of the Islamic banking industry. There are many grey areas and ambiguities in the law. Certain amendment, or even new law, needs to be urgently introduced so that any ambiguity regarding Islamic banking transaction could be overcome. Further, it should be noted that neither the IBA nor section 124 of the BAFIA exclude the application of the civil law including common law to Islamic banking transactions. This means that Islamic business law has to be applied and implemented in Islamic banking transactions within the existing common law system and all other existing laws. Therefore, these inadequate state of affairs in the laws relating to Islamic banking must be given immediate attention. First and foremost the laws applicable to Islamic banking, particularly the IBA must prescribe in detail the substantial laws, i.e Shari’ah principles which govern the transactions of Islamic banking, in which the judges in the civil courts will refer to these laws instead of English law when the Islamic banking dispute is brought to the said court. Furthermore, the IBA must be clearly prescribed that where there is a conflict between Islamic law and civil laws in relation to Islamic banking transactions, Islamic law shall prevail.

KHAIRUL IDZWAN IDRIS

Timbalan Pengerusi
Biro Ekonomi Dan Pembangunan Usahawan
Pergerakan Pemuda Umno Bahagian Setiawangsa
Wilayah Persekutuan