Financial institutions in Malaysia are required to obtain permission from Bank Negara Malaysia to participate in Skim Perbankan Islam before they can offer Islamic banking products to the public. The primary requirements for financial institutions participating in Skim Perbankan Islam are to separate their accounts from the conventional banking business and to appoint Syariah advisers to advise them on all aspects of the Islamic banking business.
At Standard Chartered, we keep a separate balance sheet for our Islamic banking business to ensure that the deposit accepted under Skim Perbankan Islam is used exclusively to invest in Islamic Banking assets. Similarly, to ensure all Islamic financing are funded by Islamic deposit.
Standard Chartered has also formed its own Syariah Consultative Committee comprising of 3 Syariah experts to advise on its Islamic banking business.
Serving the Individual Customers
Deposits can be accepted from individuals regardless of their faith, occupation, gender or race; unless there is strong reason to suspect that the money to be deposited originates from businesses or activities, which are non-Syariah compliant. Islamic financing may also be extended to individuals on the same basis, unless again there is a strong reason to suspect that the proceeds from the financing will end up to support businesses or activities which are non-Syariah compliant.
Serving the Business Customers
For business customers, dealings both in terms of accepting deposit and extending financing must exclude those businesses whose primary activity or activities are non-Syariah compliant;
Non-Syariah Compliant Businesses and Activities
Interest based financing operations including pawn broking
Conventional Insurance
Production and distribution of alcohol as well as those having business premises
where alcohol is served
Production and distribution of pornographic materials
Pig framing, pork production and production of other pig by-products
Gambling
Prostitution
Businesses whose the primary motive is entertainment (music, cinema)
Production and distribution of idols, statues, and materials for worshipping other than
Allah Almighty
Other activities, which are against the teachings of Islam
It is also not advisable to finance businesses related to tobacco and defense/weapons
production.
Asset Financing
Islamic banking offers a wide range of asset financing products where a financing facility is extended to assist customer purchase or lease a property, vehicles, goods and etc. For such cases, the assets involved, the purpose of purchase/lease and the company must not fall within the above non-Syariah compliant businesses and activities.
Examples;
We are prohibited from providing Islamic banking financing facility for the purchase or leasing a brewery, a synagogue and etc.
We are also prohibited from providing Islamic banking facility to finance a vehicle which purpose is to facilitate vice, a machine which purpose is to produce pork-related products and etc.
Finally, we are also prohibited from providing Islamic banking facility to finance a vehicle or a machine to a casino or a pornographic film outfit.
Saadiq$aver-i
