Bank Islam Malaysia Berhad : establishment and operations

Abstract

It is indeed an honour for Bank Islam Malaysia Berhad and for me personally to be invited to present a paper on the Bank in this august conference. The specific task assigned to me by the organisers is to speak on Bank Islam Malaysia Berhad. It is not possible however to deal within the pages of this paper with all aspects of the formation and intended operations of the Bank. My aim is therefore to present a rather general picture. The Muslims in Malaysia, like their counterparts elsewhere, had for a long time had the desire to practise the rules of Syariah in the fields of banking and finance. This desire was especially rekindled when in the early 1970's there was a successful move to establish the Islamic Development Bank in Jeddah in 1974, and the formation of the Islamic Bank of Dubai being the first Islamic commercial bank in 1975 followed by a number of other similar institutions in many other Islamic countries. Thus the Bumiputra Economic Congress 1980 passed a resolution calling on the Government to allow the Pilgrims' Management and Fund Board to establish an Islamic bank in Malaysia in order to mobilise and invest the funds of the Malays and the Muslims in the country in accordance with Syariah principles. Likewise at the National Seminar on the Concept of Development in Islam, which was held at Universiti Kebangsaan Malaysia in March 1981, a resolution was passed requesting the Government to take immediate step to legislate an Act which would enable the setting up of banks and financial institutions whose operations would be based on Islamic principles.