Tapping into Islamic banking universal principles

By Dr Hanudin Amin

MANY believe that the universal principles of Islamic banking are confined to the prohibition of riba, the prohibition of gharar and the prohibition of maysir. It is worth noting that the Islamic banks’ deposit and financing are transacted on the basis of trade, fee-based income and on the profit and loss sharing basis, excluding the three prohibitions.

The development of Islamic banking in Malaysia was pioneered by the incorporation of Pilgrims Savings Corporation (Perbadanan Wang Simpanan Bakal-bakal Haji), operated on 30 September 1963, which later converted to the Pilgrims Fund Board (Tabung Haji), facilitating savings to assist muslims perform the pilgrimage to Mecca. The notion of the organisation was departed in De...