Dual banking in Malaysia

7/23/2019 Dual banking in Malaysia

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1. Explain DUAL BANKING SYSTEM in Malaysia and in the US

In my opinion d!al "an#in$ system %e&e%s to the 'on(entional "an#s and

Islami' "an#s. This is the de)nition that I $a(e in *hi'h the t*o 'o!nt%ies

namely Malaysia and the U.S. is to !se the d!al "an#in$ system in thei%

%espe'ti(e 'o!nt%ies. +e%e *e 'an see the simila%ities and in&o%mation D!alBan#in$ System in Malaysia and also in the U.S.

Malaysia,hen Islami' "an#in$ *as "ein$ int%od!'ed in Malaysia in the 1-/s the

"asi' st%ate$y *as one o& %epli'ation essentially t%ans&o%min$ the so!%'es

and appli'ation o& &!nds o& 'on(entional "an#s into p%od!'ts a''epta"le to

Islam

Malaysia is a 'o!nt%y !ni0!e in the Islami' "an#in$ system as adopted the

d!al "an#in$ system is 'on(entional and Islami' "an#. Altho!$h

'on(entional "an#s ha(e lon$ "een esta"lished in ad(an'e o& the Islami'"an# it does not ae't si$ni)'antly the ope%ations o& "oth "an#s is

p%a'ti'ed in Malaysia and $i(e ee't $ood &o% "oth "an#s in de(elopin$

"an#in$ ope%ations in line *ith the 'ompetition. this 'ase *e 'an see

*he%e the !ni0!e d!al "an#in$ system in Malaysia *he%e 'on(entional

"an#in$ a%e allo*ed to oe% Islami' "an#in$ and )nan'e p%od!'ts alon$

*ith the 'on(entional p%od!'ts. This d!al "an#in$ system p%o(ides an

inte%estin$ $%o!nd to in(esti$ate the e2'ien'y o& domesti' and &o%ei$n

"an#s. This is not s!%p%isin$ *hen Malaysia "e'ame a national model &o%

non3Islami' 'o!nt%ies in the implementation o& the d!al "an#in$ system as

p%e(io!sly Malaysia implement the d!al "an#in$ &%om othe% 'o!nt%ies.

USBy 4d!al "an#in$5 *e mean the United States system !nde% *hi'h "an#s

a%e 'ha%te%ed eithe% "y a state o% "y the &ede%al $o(e%nment and a%e

%e$!lated dependin$ !pon the pa%ti'!la% sit!ation eithe% "y one o% "y

"oth. In the mode%n day as a p%a'ti'al matte% e(e%y "an# e(en i&

'ha%te%ed "y a state *ill "e %e$!lated to some extent "y the &ede%al

$o(e%nment6the p%i'e o& ha(in$ its deposits &ede%ally ins!%ed. D!al

"an#in$ has "een &!ndamental to this 'o!nt%y7s app%oa'h to "an#in$ and

has existed (i%t!ally sin'ethe 8e(ol!tion.

The%e had "een a$itation &o% "an#in$ %e&o%m in the United States &o% many

yea%s p%io% 1-19. This a$itation *as 'on'e%ned p%in'ipally *ith the need

&o% an elasti' '!%%en'y 'ent%al "an#in$ &a'ilities the de(elopment o& a

dis'o!nt ma%#et the a"olition o& the independent t%eas!%y system and

the int%od!'tion o& imp%o(ed methods o& 'lea%in$ and 'olle'tin$ 'he'#s. It

*as %e'o$ni:ed that the d!al system o& independent !nit "an#s 'ha%te%ed

and s!pe%(ised in pa%t "y the ;ede%al Go(e%nment and in pa%t "y the

(a%io!s State $o(e%nments 'ompli'ated the p%o(idin$ the m!'h needed

"an#in$ %e&o%ms "!t appa%ently it *as not &!lly %eali:ed "y the p%oponentso& ne* le$islation to *hat extent the 'ompetition "et*een national and



State "an#s *o!ld in<!en'e the &o%m!lation o& meas!%es &o% "an#in$

%e&o%m o& the ope%ation o& th/se adopted.

=. T+8EE >9? phases o& Malaysian Islami' "an#in$ system de(elopment

The de(elopment o& the Islami' "an#in$ in Malaysia has !nde%$one &o!%

distin't phases.

i. The )%st phases in(ol(ed the esta"lishment o& Islami' )nan'ial

instit!tions !nde% the spe'i)' p!%(ie* o& Islami' Ban#in$ A't 1-9.

,ith the int%od!'tion o& se'tion 1=@ o& the Ban#in$ and ;inan'ial

instit!tions A't 1--.ii. The se'ond phase o& the de(elopment o& Islami' "an#in$ ma%#et in

Malaysia a%%i(ed and in'l!ded 'on(entional "an#s *ith the

app%op%iate )%e*alls in pla'e into the ind!st%y and allo*ed them to

oe% Islami' )nan'ial p%od!'ts and se%(i'es th%o!$h its spe'ialIslami' "an#in$ di(isions >p%e(io!sly #no*n as 4S#im e%"an#an

Tanpa ;aedah5 >ST;? *indo*s?.iii. The thi%d phase o& de(elopment %elated to the se'ond phases. As

these ope%ations a'hie(ed a '%iti'al mass the option to t%ans&o%m

these ope%ations into Islami' s!"sidia%ies.i(. And the last phases o& Malaysia Islami' "an#in$ system

de(elopment as 'apa'ities *e%e enhan'ed *ith the a!en'e and

$%o*in$ impo%tan'e o& the '!%%ent ma%#et li"e%alisation allo*ed &o%

the inte%national inte$%ation o& o!% domesti' Islami' "an#in$

system.

Cn *hi'h I(e sho*n little a"o!t the Malaysian Islami' "an#in$ system

de(elopment. i& le&t to many mo%e p%oe'ts ha(e "een implemented to

ens!%e that the Islami' "an#in$ 'ontin!e to "e 'ompetiti(e *ith

'on(entional "an#s s!'h as a&te% the esta"lishment o& Ban# Islam Malaysia

Be%had >BIMB? in 1-9 Ta#a&!l Malaysia Sya%i#at Ta#a&!l Malaysia *as

in'o%po%ated on =- No(em"e% 1-@. I& yo! *ant 'onside%ed &o% Islami'

)nan'e in Malaysia has lon$ existed "e&o%e the esta"lishment o& Ban#

Islam Malaysia Be%had Ta"!n$ +ai itsel& *hi'h e%"adanan ,an$

Simpanan Ba#al3Ba#al +ai *as set !p in No(em"e% 1-F= and "e$an its

ope%ation on 9/ Septem"e% 1-F9. The 'o%po%ation to mana$e the sa(in$s

o& M!slims intendin$ to pe%&o%m the +a pil$%ima$e *as the %es!lt o& a

*o%#in$ pape% entitled 8an'an$an Mem"ai#i E#onomi Ba#al3Ba#al +ai

p%esented "y 8oyal %o&esso% Un$#! A:i: in 1-H- to imp%o(e the e'onomy

o& intendin$ pil$%ims.



9. 8ead The ;ollo*in$ Ta"le 1

No. Year Total

1. 1-9 9F-//=. 1-@ 9=HH999. 1-H H1@=99@. 1-F 1/-9///

H. 1-J -9=9=1F. 1- 1199-HHJ. 1-- 19F9@1. 1--/ 1@=H-=J-. 1--1 1@//9-11/. 1--= 1FJF=1111. 1--9 =//-//1=. 1--@ @H/@F19. 1--H F1-J@=91@. 1--F 1/19=@F11H. 1--J 1J19/@

1F. 1-- =119/F11J. 1--- 9F19F@1. =/// @J/19H91-. =//1 H-9H91J=/. =//= F/J/@=F=1. =//9 ==1F@/==. =//@ -@-F/HF=9. =//H 111=@///

Based on yo!% '!%%ent #no*led$e *hy the%e exists the o"(io!s

pe%&o%man'e &o% Islami' "an#in$ assets 'ommen'in$ in 1--93!ntil no*>+int please p%o(ide th%ee >9? %easons and explain ea'h o& them?

,e 'an see the day *he%e the de(elopment in the Islami' "an#in$

ind!st%y today as the ta"le a"o(e sho*s a (e%y sha%p in'%ease in the

n!m"e% in this Ind!st%y. This *as d!e to th%ee thin$s that 'o!ld "e %eason

*hy the%e exists the o"(io!s pe%&o%man'e &o% Islami' "an#in$ assets

'ommen'in$.

I. In'%ease in the pop!lation o& people in Malaysia

In'%easin$ pop!lation in Malaysia is one %eason to the in'%ease in

pe%&o%man'e &o% Islami' "an#in$ assets "e'a!se o& the in'%ease inIslami' "an#in$ se%(i'es pa%ti'!la%ly Islami' "an#in$ p%od!'ts at



p%esent. The pop!lation o& Malaysia is '!%%ently at =J million in

=/11 and this n!m"e% *ill in'%ease &%om yea% to yea%. Th!s this

p%o(ides the "est oppo%t!nities to "an#s pa%ti'!la%ly in Islami'

"an#in$ ope%ations to &!%the% thei% "!siness and ma%#etin$

st%ate$ies to att%a't these people to !se the Islami' "an#in$

p%od!'ts. It 'an "e 'on'l!ded he%e that the in'%ease in pop!lation isa &a'to% to in'%ease the pe%&o%man'e o& Islami' "an#in$.

II. S!ppo%t &%om the $o(e%nment in imp%o(in$ the Islami' "an#in$

ind!st%y

S!ppo%t &%om the $o(e%nment in the Islami' "an#in$ ind!st%y is also

one o& the %easons *hi'h led to an in'%ease in pe%&o%man'e Islami'

"an#in$ assets. I& seen *hat has "een done "y the $o(e%nment to

int%od!'e the 4S#im e%"an#an Tanpa ;aedah5 >ST;? to help the

imp%o(ement in this ind!st%y. B!t it is also the Malaysian$o(e%nment $i(es st%on$ s!ppo%t and oppo%t!nities that not a "it o&

Islami' "an#in$ and )nan'ial instit!tions to th%i(e. ;o% example the

$o(e%nment did not impose any in'ome tax on sa(in$s made in the

Lem"a$a Ta"!n$ +ai. Besides that the $o(e%nment also p%o(ides

tax %elie& >not s!"e't to 'o%po%ate tax? to the Lem"a$a Ta"!n$ +ai

&o% 9/ yea%s and Sya%i#at Ta#a&!l Malaysia &o% 1H yea%s. This sho*s

that the $o(e%nments en'o!%a$ement and st%on$ s!ppo%t to the

Islami' "an#in$ instit!tions to mo(e ahead in tandem *ith

'on(entional "an#in$.

III. an in'%easin$ n!m"e% o& 'o%po%ations

This is also %eason *hi'h has "een an in'%ease in pe%&o%man'e &o%

Islami' "an#in$ assets. I& seen 'o%po%ate '!stome%s 'omp%isin$ o&

Malaysian 'ompanies listed on the )%st "oa%d and se'ond "oa%d o&

the K!ala L!mp!% Sto'# Ex'han$e >KLSE?. A listed 'ompany is

'omp%ised o& small 'ompanies and la%$e si:e *ith a minim!m paid3

!p 'apital has "een pla'ed "y the KLSE. This 'ompany "asi'ally

%e0!i%es la%$e )nan'ial %eso!%'es to mana$e thei% "!siness

a'ti(ities. The%e&o%e they *ill t%y to $et the )nan'ial %eso!%'es o%

the !se o& "an#in$ p%od!'ts *hethe% &%om 'on(entional "an#in$ as*ell as o& Islami' "an#in$. ;%om the pe%spe'ti(e o& an in'%easin$

n!m"e% o& 'ompanies *e 'an see &%om yea% to yea%. G%o*th o&

these 'ompanies is (e%y en'o!%a$in$ indeed as *e 'an see the

%easons &o% the in'%ease in pe%&o%man'e &o% Islami' "an#in$ assets.

So indi%e'tly it 'an lead to in'%eased demand &o% the !se o& "an#in$

p%od!'ts mo%e e2'iently and ee'ti(ely. it $i(es ad(anta$e to the

"an# in mana$in$ the "!siness st%ate$ies o& a mo%e 'omp%ehensi(e

and ee'ti(e espe'ially in p%o(idin$ 0!ality se%(i'e and oe%in$

0!ality p%od!'ts that a%e att%a'ti(e to these 'ompanies.



@. Dis'!ss the p%o)t a''!m!lation 'on'ept in Islam and its %elationship to an

Islami' "an#.

Allah says in S!%ah al3Maidah >1J?All that is in the hea(ens and the ea%th "elon$s to Allah. These people

sho!ld sha%e thei% "lessin$ "y '%eatin$ "alan'e and ha%mony in so'iety.

A''o%din$ that *e sho!ld #no*n e(e%ythin$ in this *o%ld is o*ned "yAllah s.*.t and *e as a h!man as a t%!stee that $i(en "y Allah. By that7s

*e need to than#&!l to Allah and need to !se the p%ope%ty in the %i$ht *ay

means Islami' *ays. Cthe% than that7s *e also need to #no* to dist%i"!te

&a(o%s to "e $%anted to those in need and also no deny the "lessin$ o& God

$%a'e. And addition *hen *e t%y to a'0!i%e *ealth "esto*ed "y the God

*e need to #no* the limits o!tlined in Islam s!'h as a"stainin$ &%om

!s!%y $am"lin$ &%a!d not ha%m&!l to *ith othe%s and also no dama$e

en(i%onment.

%o)t a''!m!lation not only &o'!ses to the indi(id!al pe%&o%man'e "!t alsoin'l!des the instit!tion and also "an#s. In the "an# pe%spe'ti(e ea'h o&

"an#s pe%&o%ms to thei% $oal s!'h as to $ain a p%o)t. +o*e(e% &o% Islami'

"an#in$ instit!tions p%o)t a''!m!lation is not a main o"e'ti(e "!t mo%e

to the h!man *el&a%e in o"e'ti(e to help '!stome%. Islami' "an#in$

ope%ate thei% t%ansa'tion *itho!t in(ol(e in %i"a $am"lin$ and othe%s as a

)%st o"e'ti(e to ope%ate in the Islami' *ay. It means Islami' "an#in$ $ain

a p%o)t in halaal only to des'%i"e Islami' "an#in$ &ollo* the sha%iah

>Islami' la*?. A''o%din$ that7s *e 'an see *hen Islami' "an#in$ p%od!'t

s!'h as m!dha%a"ah >p%o)t lost sha%in$? m!sya%#ah >oint (ent!%e?

leasin$ a%3 %ahn! and othe% p%od!'t p%od!'e app%op%iate *ith the Islami'o!tline. This enti%e p%od!'t ad!sted *he%e the main o"e'ti(e is not only

to the p%o)t "!t also to h!man *el&a%e s!'h as m!dha%a"ah inst%!ment

*he%e mo to the sha%in$ eithe% losses o% $ain the p%o)t. Cthe% that also

not in(ol(e in inte%est %ate >%i"a? $am"lin$ and also 'heatin$.

Next sta$es in p%o)t a''!m!lation a%e payin$ the :a#at. a#at is one o&

the impo%tant pa%ts as a m!slim pe%son and also &o% the Islami' "an#in$

instit!tion. a#at means a 'e%tain amo!nt o& p%ope%ty that m!st "e

%emo(ed &%om 'e%tain. a#at is (e%y impo%tant to 'leanse the p%ope%ty that

is d!e the%e "e'a!se ea'h p%ope%ty that *e ha(e "elon$s to God. Islam

p%omote the 'on'ept m!t!al assistan'e *he%e &o% the %i'h man m!st help

the poo% man. That7s means "y payin$ the :a#at poo% man 'an &eel mo



'om&o%ta"le li&e. In that Islami' "an#in$ also in the same sit!ation *he%e

need to pay a :a#at &%om the p%o)t thei% $ain. That7s also as *ay ho* to

'leansin$ thei% p%ope%ty o% p%o)t.

Unde% p%o)t a''!m!lation also *e need to #no* *he%e not only payin$

the :a#at "!t also need to in(ol(e in 'ha%ity a'ti(ities. ,ith the p%o)t *eha(e *e need to help the 'hild%en o%phaned disa"led pe%son and also &o%

ea'h need help.

http***.a:mila*.'om.mya%'hi(esA%ti'leo!tsidep!"li'ationsasian'o

!nselLi"e%alisationo&malaysianislami')nan'ialsystem>//1=@=-H?.D

;

http***.islami'3*o%ld.netislami'3statemalayislam"an#.htm

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Dual banking in Malaysia