How much do you know about Islamic banking in Malaysia?

History and Development of Islamic Banking in Malaysia

• Financial system in Malaysia includes commercial banks, finance companies, merchant banks, discount houses, and more.
• Islamic banking is based on Islamic principles of Shariah, akhlaq, and aqidah.
• Islamic banking in Malaysia is overseen by the Ministry of Finance, Central Bank of Malaysia, and Shariah Advisory Council.
• Malaysia's approach to Islamic finance includes three stages: instituting foundations, institutional building and activity generation, and strategic positioning and international integration.
• Malaysia has 16 Islamic banks, 27 conventional banks, and 11 investment banks.
• Conventional banks operate based on interest rates, while Islamic banks follow Shariah principles that prohibit interest and transactions involving uncertainty or speculation.
• Islamic financing and investment are based on trading contracts, fairness and justice, community benefits, participation contracts, and supporting contracts.
• Islamic banking market share in Malaysia has grown steadily, with 22% in 2014 compared to 7.8% in 2007.
• In May 2015, Islamic banks held 22% of total assets in Malaysian banking.
• Globally, Islamic banking assets reached US $1.796 trillion in 2013, growing at an annual rate of 10.4%.
• The top 20% of Islamic banks have an average returns on equity of 12.6%, compared to the conventional average of 15%.
• Qatar, Indonesia, Saudi Arabia, Malaysia, UAE, and Turkey (QISMUT) accounted for 78% of the world's Islamic banking assets in 2012, with expected growth of 19.7% over 2013-2018.