Islamic banking have successfully develop in Malaysia in great way. Its have broaden their services unwaveringly over the last three decades and now, with total bank assets of $1.8 trillion and a forceful growth rate in a year. Its have improve greatly as essential sector in finance internationally. With poor mismanagement, low performance and unsuccessful in evidence through conventional financial sector in nowadays finance crisis, Islamic banking stay steady and strong. The fast growing in Islamic banking had gather many attention in banking industries.
Islamic banking is greatly involved with economic growth although had been controlled in various determinants, associated with level of financial depth. The results are strong through variety of specifications, sample composition and time periods. Economic growth had increase with development of Islamic banking in financial institutions. Islamic banks gain profit from equity involvement which needed a bank to receive a share from borrower in their profit than pay interest.
Few commercial banks have division that give Islamic banking assistance to customers.
Islamic banking rules show those Islamic morals. Islamic principles on transaction which named as Fiqh al-Muamalat. Usually, financial transaction in Islamic banking are base of ethical investing. Islamic banking only follow morality aspect so the banking institution are under trust. Islamic banking follow Sharia Law which is based on Al Quran and Hadith. When they need more information or guidance for certain aspect, Islamic bankers usually will ask the learned scholar or just use independent answer based on scholarship and customs. The banker will make sure their ideas do not different from the fundamental principles of the Quran.
This show Islamic banking only using right guidance in operating their business. Islamic banking had been practice well in Malaysia since this institutions had actively growing and been accepted by many peoples. Where not only muslim peoples but also who have different belief. Development of Islamic banking in Malaysia positively show a good sign which next maybe will be in same level as international banking institutions.
Islamic banking is really important to Islamic peoples in Malaysia in many ways. We can see Islamic banking can bring many advantages to peoples in Malaysia especially muslim who want to practice banking in correct way. Islamic banking start to receive recognition in Malaysia and the development also increase in high level. There a lot of things we can gain after developing Islamic banking in Malaysia. Islamic law who also can be called as Shariah law give permission for every types of economic activities except there really prohibited. For example riba, gamble, sale of non halal product, overload uncertainty, conventional insurance, activities that unallowed in Shariah and stock that not by Shariah. Islamic banks is not only for Muslims. This proof to give foundation of honest financial way and suitable for everyone no matter of their religion or race. This show all diverse people can practice Islamic banking as they treat all the customer in same way and fair. Besides, Islamic law need all Islamic financial and business transaction depend on transparency, accuracy, and disclosure of important information so that team don’t have benefit on other one. The transparent nature of their business is to ensure all will be good and effortless to understand with small area for surprise payment or hidden fees. Using Islamic banking will ensure great transparency to customers.
Compounding of behind the time payment charges are not allowed in Islamic banks. When Islamic finance are unpaid, the behind the time payment charges will only be enforced on the customer who have good balance that is due and payable. This show Islamic banking really consider their customer and not right away charges them without knowing their credibility first. Next, sale-based Islamic finance product for example auto-financing and property financing, customer will pay the highest amount which will be decided upfront, customer can assured the total paid will never more than maximum amount that had been already set. So overprice product will be not happen as all product already have their price. People will not taken advantage on it and charges more than it should.Now we can see Islamic banking have already develop a very fair requirement for all party so there no bias at all. Development in Islamic banking can give many benefit and help people out there. Without Islamic banking, peoples only can practice conventional way which don’t suit their lifestyle especially for muslim people. Now muslim people can join Islamic banking to invest and save their money based on their belief. That is why Islamic banking is really important in banking industry sector.
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