Islamic Banking Regulation Quiz

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Questions and Answers

What is the main purpose of banks in developing economies?

To provide financing for large corporations only
To promote and maintain fair and transparent securities markets
To solve market failures due to information asymmetry, economies of scale, and liquidity mismatches (correct)
To develop standardized Shariah-compliant financial documentation

What is the role of the Central Bank of Malaysia (BNM)?

To prepare accounting, auditing, governance, ethics, and Shariah standards for IFIs
To develop standardized Shariah-compliant financial documentation
To promote and maintain fair and transparent securities markets
To formulate and conduct monetary policy, regulate and supervise financial institutions, and provide oversight over money and foreign exchange markets (correct)

What is the function of the Securities Commission?

To ensure the soundness and stability of the Islamic financial services industry
To provide financing for large corporations only
To promote and maintain fair and transparent securities markets (correct)
To develop standardized Shariah-compliant financial documentation

What is the role of the International Islamic Financial Market (IIFM)?

To develop standardized Shariah-compliant financial documentation (B) Signup and view all the answers

What is the purpose of the National Shariah Advisory Council (NSAC)?

To ensure the soundness and stability of the Islamic financial services industry (B) Signup and view all the answers

What does the Shariah Governance Framework set out?

The expectations of the Bank on an IFI's Shariah governance structures, processes, and arrangements (B) Signup and view all the answers

What is the role of the International Shariah Research Academic (ISRA)?

To conduct Islamic finance and Shariah related research (A) Signup and view all the answers

What is the function of the Islamic Financial Services Board (IFSB)?

To ensure the soundness and stability of the Islamic financial services industry (D) Signup and view all the answers

What is the mandate of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)?

To prepare accounting, auditing, governance, ethics, and Shariah standards for IFIs (A) Signup and view all the answers

What is the purpose of the Central Bank Act 2009?

To regulate and supervise financial institutions (B) Signup and view all the answers

What is the role of the Government Funding Act 2005?

To provide financing for large corporations only (A) Signup and view all the answers

What is the role of the Capital Market and Services Act 2007?

To promote and maintain fair and transparent securities markets (C) Signup and view all the answers

What is the primary role of banks in developing economies?

To act as a source of finance for firms (A) Signup and view all the answers

Which regulatory body in Islamic finance and banking is responsible for ensuring the soundness and stability of the entire industry, including banks, capital markets, and insurance?

Islamic Financial Services Board (IFSB) (D) Signup and view all the answers

Which regulatory body in Islamic finance and banking is responsible for developing standardized Shariah-compliant financial documentation, product confirmations, and guidelines for the Islamic Financial Services Industry (IFSI)?

International Islamic Financial Market (IIFM) (B) Signup and view all the answers

Which regulatory body in Islamic finance and banking is responsible for preparing accounting, auditing, governance, ethics, and Shariah standards for the IFIs, participants, and overall industry?

Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) (A) Signup and view all the answers

Which regulatory body in Islamic finance and banking was established to promote and maintain fair, efficient, secure, and transparent securities and futures markets and facilitate the orderly development of an innovation and competitive capital market?

Securities Commission (D) Signup and view all the answers

Which legal governance in Islamic banking was established to provide oversight over money and foreign exchange markets?

Central Bank Act 2009 (A) Signup and view all the answers

Which legal governance in Islamic banking was established to promote the development of the Islamic financial services industry?

Islamic Finance Services Act 2013 (C) Signup and view all the answers

What is the National Shariah Advisory Council (NSAC) responsible for in Islamic finance in Malaysia?

Serving as the highest Shariah authority (D) Signup and view all the answers

What is the role of the Shariah Governance Framework in Islamic banking?

To ensure that all operations and business activities are in accordance with Shariah (B) Signup and view all the answers

What is the International Shariah Research Academic (ISRA) responsible for in Islamic finance?

Conducting research on Islamic finance and Shariah (D) Signup and view all the answers

Which regulatory body in Islamic finance and banking is responsible for regulating and supervising financial institutions?

Central Bank of Malaysia (BNM) (B) Signup and view all the answers

Which regulatory body in Islamic finance and banking is responsible for promoting the orderly development of an innovation and competitive capital market?

Securities Commission (A) Signup and view all the answers

Flashcards

Dominant position of banks

Banks are the main source of finance in developing economies.

Market failures

Situations where markets do not efficiently allocate resources, leading to the need for banks.

Information asymmetry

A condition where one party has more or better information than the other, leading to inefficiencies.