Look at the Assignment Criteria Essay Example | Topics and Well Written Essays - 3000 words

Look at the Assignment Criteria - Essay Example The philosophies and principles that form the basis of Islamic banking have been detailed in the Holy Quran and the Sunnah of Prophet Muhammad. Islamic banking is seen as the revival of Islam. This is also taken as an expression of the Muslims to live on the principles of Islam. In Malaysia, there is a separate legislation governing the Islamic banks and these co-exist with the traditional banks. The Islamic Banking Act of 1983 vested the powers in the BNM to ensure that the Islamic banks worked under regulation. Bank Islam Malaysia Berhad (BIMB) was the first Islamic bank to be established in 1983 and they adhere to the principles as stated in the sharia. (PKUKM, n.d.). By 1992 BIMB spread out all over the country. Very soon it developed a network of 80 branches with 1200 people working in them. Bank Muamalat Malaysia Berhad (BMMB), the second Islamic bank, came into existence following the merger of Bank Bumiputra Malaysia Berhad (BBMB) with Bank of Commerce (Malaysia) Berhad (BOCB ). The Islamic banking system can be viable if it fulfills there vital requirements. The number of players in the banking system should be large; they should offer a wide range of financial and banking instruments. Besides, there should be an active Islamic money market (PKUKM, n.d.). In addition, the Islamic banking system should have the characteristics of Islam and work under those principles. BNM played the lead role in disseminating Islamic banking at the national level so that it could reach all Malaysians. The commercial banks too were encouraged to promote Islamic banking products and services from their existing infra structure and branches. This increased the number of institutions that offered Islamic banking products and services within the shortest time and minimum costs. Under the scheme known as "Skim Perbankan Tanpa Faedah" BNM further enhanced the promotion of Islamic banking. The Islamic banks or the