View - ResearchGate

Aishath Muneeza, Ismail Wisham, Rusni Hassan,
International Islamic University Malaysia
commercial banks are vigorous indicators for positive
expectations.
Malaysia endured the gradual approach of implementing
Islamic banking. Although, the country is facing problems in
segregating Islamic and conventional banking fixed assets
and overheads expenses but, no doubt, it has successfully
developed a viable Islamic financial system. After developing
an Islamic banking infrastructure and Islamic instruments
for financial investments and liquidity management, the
country is actively progressing towards the development of
Islamic capital market. Malaysia is now also inviting the
international market to experience its new dual banking
system.
It shall be noted here that the incongruous legal struggle
stems from the dodges in the devised legal frameworks.
Hence in this part of the paper, a comparative study of a
country which transformed all of its laws to accommodate
Islamic banking would be divulged into, followed by a
description of a country in which an Islamic Banking
framework co-exist with a conventional banking system in
harmony.
Pakistan: a convert of Islamic banking
The process of Islamizing the financial structure of Pakistan
is in conjunction with the global resurgence of Islamic
banking in the late seventies. Pakistan was among the three
countries in the world that has been trying to implement
Islamic banking at national level. This process started with
presidential order to the local Council of Islamic Ideology
(CII) to prepare the blueprint of interest free economic
system on September 29, 1977. The council included
panelists of bankers and economists, submitted their report
in February 1980, highlighting various ways and sufficient
details for eliminating the interest from the financial system
of Pakistan. This report was the seed for Islamizing the
banking system in Pakistan.
The Islamic banking movement in Pakistan was countrywide.
As it was a gargantuan mission, the barter plan was
implemented in phases. The development was started by
transforming the operations of specialized financial
institutions like National Investment Trust (NIT), Investment
Corporation of Pakistan (ICP), and House Building Finance
Corporation (HBFC) to the system conforming to the Islamic
193