Research & Innovation

Shariah Issues Relating to Resolution of Islamic Banks 

This research explores Shariah issues pertaining to the resolution of non-viable Islamic banks, with a primary focus on the transfer mechanism. This research identifies Shariah considerations that justify the resolution of Islamic banks; investigates how different Islamic banking models affect Shariah treatments in an Islamic bank’s resolution; examines the potential Shariah issues about the various resolution options for Islamic banks and provides Perbadanan Insurans Deposit Malaysia (PIDM) with relevant solutions to overcome the issues; as well as facilitates PIDM in the removal of any impediments to a Shariah-compliant transfer of business by making the business of Islamic banks transfer ready. The findings of this research would significantly impact the Islamic banking industry in Malaysia as it sets a basis for PIDM’s proposal to the Shariah Advisory Council of Bank Negara Malaysia on the resolution of Islamic banks in Malaysia.

ESG-i Assessment Framework: Empowering Sustainable and Ethical Growth for Micro, Small and Medium-Sized Enterprises 

The ESG-i Assessment Framework serves as a starting point for MSMEs to understand complex sustainability frameworks and taxonomies that are incongruent with their operational reality. By incorporating Shariah principles and embracing the Quadruple Bottom Line (QBL) concept—Planet, People, Profit, and Principle—the framework provides a comprehensive blueprint for evaluating sustainability practices among MSMEs. In contrast to the existing frameworks, the ESG-i Assessment Framework simplifies the criteria for evaluating sustainability practices among MSMEs and provides them with an assessment tool to comprehend and integrate into their businesses, regardless of their size and scale. The ESG-i Assessment Framework is increasingly crucial as the European Union’s Carbon Border Adjustment Mechanism is set to take effect in 2024, bringing about substantial implications for the Malaysian economy, particularly impacting MSMEs, which contribute over 16 per cent to the country’s exports.

Developing the Tayyib Framework for Islamic Finance Institutions in Malaysia 

The tayyib concept represents a transformative approach in Islamic finance, elevating it beyond mere Shariah compliance (halal) to reach the heights of socially, environmentally, and economically beneficial (tayyib). It aims to position Islamic finance as a global leader in ethical and responsible financial practices. Beyond being a national initiative, tayyib calls for global collaboration to integrate its principles across all Islamic financial markets, ensuring that every financial decision aligns with the maqasid al-Shariah. By operationalising tayyib through collective effort, Islamic finance can fulfil its promise of advancing welfare for all.

Islamic Banking in Malaysia: Past, Present and Future 

This research documents Malaysia’s pioneering role and leadership in developing the Islamic finance industry, with a particular focus on Islamic banking. It captures the thought processes underpinning key progressive efforts and improvement exercises through interviews with eminent leaders of Islamic banking and finance, including regulators, Shariah scholars and practitioners from the past and present. In this discourse, the successful journey of Maybank Islamic as the largest Islamic commercial bank and its contributions to the overall growth and development of the Islamic banking industry in Malaysia is highlighted.

Developing Maqasid al-Shariah-based Value-Based Intermediation for Takaful (VBIT) Scorecard 

The Maqasid al-Shariah Scorecard (MSS) for the Malaysian takaful industry aims to provide measurable performance indicators to assess the growth and impact of the industry, aligning it with maqasid al-Shariah. The initiative follows the launch of Malaysia’s Financial Sector Blueprint (2022–2026) and the Value-Based Intermediation for Takaful (VBIT) Roadmap. The MSS will also solidify Malaysia’s position as a leader in operationalising maqasid in takaful, benefiting both the industry and vulnerable communities. The scorecard is expected to reinforce stakeholders’ confidence in takaful, ensuring resilience and compliance with Shariah principles.

Shariah Endorsement of UNHCR Zakat Fund and Report on Zakat Potential in the Asia Pacific Region 

This project provides an endorsement that the collection and distribution of zakat by UNHCR, the United Nations Refugee Agency, are conducted in accordance with Shariah, allowing Muslims to confidently contribute their zakat to support refugees and displaced persons through this fund.

In addition, the project provides a report that analyses the potential for zakat collection in this region. It examines the opportunities and challenges in mobilising zakat funds to support social welfare and humanitarian causes within Asia Pacific, highlighting the region’s capacity to contribute significantly to global zakat resources.

New Takaful Model for Market Competitiveness 

This new proposed takaful model, which was undertaken in collaboration with Hong Leong MISG Takaful (HLMT), adopts the concept of musharakah ta’awuniyyah, where both the takaful operator and participants contribute to a mutual fund known as the Musharakah Ta’awuniyyah Fund (MTF). This model is uniquely designed to uphold the principle of ta’awun (mutual assistance) while achieving competitive business outcomes.