Legislative conflicts facing Islamic banking in Malaysia

Abstract

This is a qualitative research focusing on the legislative conflicts facing Islamic banking in Malaysia. This research identifies the practical legislative conflicts facing Islamic banking in Malaysia by analysing the statutory provisions that have been invoked in the reported Malaysian Islamic banking cases from 1983-2011. The objectives of this research include finding out the most frequently invoked legislations in the reported Islamic banking cases and also to examine the legislative conflicts evident in the provisions of those legislations that have been utilised in deciding the cases. This research gives an overview of the legal development of Islamic banking in Malaysia and subsequently examines reasons for legislative conflicts in Islamic banking in Malaysia evident in regulatory laws, substantive laws and procedural laws applicable to Malaysian Islamic banking. It is hoped that this research will assist the harmonisation process of legislations to facilitate the sustainable development of Islamic banking in Malaysia and help to fill the gap between the literatures on legislative conflicts facing Islamic banking in Malaysia which is traditionally focused on either various products or parts of different legislations rather than looking at the legislations comprehensively.