View - ResearchGate

Aishath Muneeza, Ismail Wisham, Rusni Hassan,
International Islamic University Malaysia
the rubrics and the contentious issues relating to products
and services in the nascent Islamic finance industry.
Similarly, he believes that greater transparency in the
Shariah governance process, more professional articulation
of the resolutions and statements, and prior debate and
consultation between scholars and other stakeholders in the
industry, could go a long way in mitigating the
misconceptions and confusion that has arisen as a result of
some of the recent Shariah rulings. 1
Another major development in August 2009 was the
issuance by Bank Negara Malaysia of the first in a series of
Shariah references. The first one, Shariah Parameter
Reference 1 or murabaha Parameter (SPR1), will be followed
by Shariah Parameters on ijarah (leasing), mudaraba (trust
financing), musharaka (partnerships), istisna (construction
financing) and wadiah (current accounts). SPR1 outlines the
main Shariah requirements in the contracts and provides
examples, methods and models for practical application of
the contract, and is issued as guidance and reference to all
IFIs. It also marks a key advancement in the bank's efforts to
promote greater harmonization in the development of the
Islamic finance industry.
Sagacity of Conventional Legislations with the
Islamic Banking System
An appropriate legal, institutional and tax framework is a
basic requirement for establishing sound financial
institutions and markets. Islamic jurisprudence offers its
own framework for the implementation of commercial and
financial contracts and transactions. Nevertheless,
commercial, banking and company laws appropriate for the
enforcement of Islamic banking and financial contracts do
not exist in many countries. And this is a dilemma.
In different jurisdictions of the world, the legal frameworks of
Islamic Banking vary. It totally depends on the legal systems
existing in the country. For example in Malaysia, Turkey,
Sudan, Yemen and United Arab Emirates they have enacted
Islamic Banking laws parallel to the existing conventional
1 Arab news (11 th October 2009); Islamic Banking Special Supplement:
Shariah governance a challenge to Islamic banking by Mushtak Parker.
203