The development of the legal framework governing the Shari'ah committee of the Islamic banking and takaful institutions in Malaysia

In Malaysia, the Sharῑᶜah Committee established by Islamic banks and takāful operators are subject to the legal framework as set out by the legislations governing Islamic financial services. The legal framework of the Sharῑᶜah committee existed since the enforcement of Islamic Banking Act 1983 (Act 276) in year 1983. Since that, improvements have been made by the government to strengthen such legal framework via a series of legal amendments as well as the introduction of new legislations. Apart from that, the Sharῑᶜah Committee is also governed by the Guidelines issued by Central Bank of Malaysia to ensure sustainability of Islamic banking and takāful industry in Malaysia. This article adopted historical and comparative methods in order to analyse the development of the legal framework governing the Sharῑᶜah Committee of the Islamic banking and takāful institutions in Malaysia. The study found that the legal framework of the Sharῑᶜah Committee is mainly governed by Islamic Financial Services Act 2013 (Act 759) and Sharῑᶜah Governance Framework for Islamic Financial Institutions (CBM/RH/GL 012-3)

The Regulatory Framework Governing Traditional Arbitration in Resolving Islamic Banking Disputes in Malaysia: The Time for Change

Introduction to The Problem: Malaysia has established its place as a global leader in Islamic banking due to the considerable efforts made by the Malaysian lawmakers to enhance the Islamic banking dispute resolution framework and provide the Islamic banking disputants with several resolution mechanisms, such as traditional arbitration. However, using traditional arbitration in resolving Islamic banking disputes is not free from criticisms. Therefore, there is a need to find an alternative or enhanced form of traditional arbitration mechanism.Purpose/Objective Study: This article examines the regulatory framework governing traditional arbitration in resolving Islamic banking disputes in Malaysia.Design/Methodology/Approach: This article is based on doctrinal legal research Methodology. Primary data was secured from several sources, such as Acts, Laws, and Court Cases. While secondary data was collected from books, journal articles, and online databases. Both data are analyzed by using critical and analytical approaches.Findings: It is found that Arbitration Act 2005 (Act 646) and I-Arbitration Rules 2018 have been subjected to several amendments to align with the international norms and best practices. However, Malaysian lawmakers should start thinking out of the box by reinforcing the Islamic banking disputants with an effective resolution mechanism known as electronic arbitration (hereinafter referred to as “e-arbitration”). Doing so would facilitate prompt access to justice in Islamic banking disputes in Malaysia.Paper Type: Research Article

[Analysis of Zakat Application Screening Procedures in Selected States in Malaysia] Analisis Prosedur Saringan Permohonan Zakat di Negeri-Negeri Terpilih di Malaysia

The existence of cases of fraud in the application for zakat assistance is due to the community who want to take advantage through falsification of documents and qualifications. This issue can cause zakat fund assistance to fall into the hands of those who are not eligible, thus denying the asnaf who are more entitled not to receiving their rights. The question that can be raised is, are there any specific policies and procedures related to the screening process and selection of asnaf? Is there a policy or law that regulates the screening process in ensuring the validity of the applicant as a qualified asnaf? What is the practice and approach of the state zakat institutions to ensure the screening and monitoring process to determine the authenticity status of the asnaf? By sampling the administration of zakat in five selected states, namely Kedah, Penang, Perak, Selangor and Negeri Sembilan, the study found that the screening procedure is the most important step in ensuring that each asnaf is truly eligible to receive zakat. In addition, the criteria and eligibility as a zakat applicant can be identified more systematically without the occurrence of dropouts or room for fraudulent eligibility. Specific and orderly procedures in the asnaf eligibility screening process are also able to provide added value in the framework of the transformation of the governance of zakat institutions in Malaysia, especially in the aspect of distribution of zakat funds to asnaf as enshrined in the Qur’an. Wujudnya kes-kes penipuan dalam permohonan bantuan zakat adalah disebabkan terdapat kalangan masyarakat yang mahu mengambil kesempatan melalui pemalsuan dokumen dan kelayakan. Isu ini boleh menyebabkan bantuan dana zakat jatuh ke tangan orang yang tidak layak, sekaligus menafikan golongan asnaf yang lebih berhak tidak menerima haknya. Persoalan yang boleh ditimbulkan ialah, adakah wujud polisi dan prosedur khusus berkaitan proses saringan dan pemilihan asnaf? Apakah wujud polisi atau undang-undang yang mengawalselia proses saringan dalam memastikan kesahihan pemohon adalah asnaf yang layak? Bagaimana amalan dan pendekatan institusi zakat negeri-negeri bagi memastikan proses saringan dan pemantauan bagi menentukan status keaslian asnaf? Dengan menjadikan sampel pentadbiran zakat di lima buah negeri terpilih iaitu negeri Kedah, Pulau Pinang, Perak, Selangor dan Negeri Sembilan, kajian mendapati prosedur saringan merupakan langkah terpenting dalam memastikan setiap asnaf yang benar-benar layak menerima zakat. Di samping itu, kriteria dan kelayakan sebagai pemohon zakat dapat dikenal pasti secara lebih sistematik tanpa berlaku keciciran atau ruang penipuan kelayakan. Prosedur khusus dan teratur dalam proses saringan kelayakan asnaf juga mampu memberi nilai tambah dalam kerangka transformasi tadbir urus institusi zakat di Malaysia khususnya dalam aspek agihan dana zakat kepada asnaf sebagaimana yang telah termaktub di dalam al-Qur’an

Pembangunan penyelidikan fatwa kontemporari dalam menghadapi cabaran globalisasi: satu pendekatan

Globalisasi merupakan suatu reformasi budaya sedunia yang mempengaruhi segala lapisan masyarakat.Walaupun pada asalnya di arahkan kepada keterbukaan dalam aktiviti ekonomi sedunia, tetapi kini telah mula merangkumi keterbukaan dan perubahan dalam aspek politik, sosial dan pemikiran masyarakat. Kepelbagaian isu yang timbul ini adalah kesan langsung globalisasi ialah perkembangan drastik revolusi dan evolusi sains dan teknologi. Keunikan hubungan antara wahyu dan akal serta kefahaman inilah yang memastikan penyelidikan fatwa sentiasa unggul dan mampu menanggapi permasalahan semasa.Objektif penyelidikan fatwa sebenarnya wujud perkaitan yang rapat dengan objektif Syariah (Maqasid al-Syariah) itu sendiri.Penyelidikan fiqh berasaskan kepada dua kerangka utama yang tidak boleh dipisahkan antara satu sama lain. Pertama ialah wahyu Allah yang kebenarannya adalah mutlaq dan bersifat muqaddas, seperti yang terdapat di dalam al-Quran dan al-Sunnah.Kerangka pertama bercirikan wahyu memerlukan kefahaman manusia dalam menanggapi dan mentafsirkan maksudnya.Di atas asas inilah fuqaha berijtihad dan melakukan usaha-usaha penyelidikan fiqh dengan meluas dan efektif. Kajian menggarapkan tiga (3) kaedah utama iaitu, analisis kandungan yang meneliti kerangka epistemologi fatwa dan ijtihad dalam Islam (persoalan sumber, sifat sesuatu ilmu dan neraca penilaian) yang digunakan seseorang sarjana/penulis Syariah; kaedah pensejarahan dan perbandingan yang meneliti sejarah pembinaan hukum Islam dan kaedah penelitian sosiologi yang meneliti latar belakang masyarakat seperti aspek sosio-politik, struktur, ekonomi dan institusi tertentu (seperti impak globalisasi) yang mempengaruhi penghasilan fatwa. Perbincangan artikel ini meliputi konsep dan pendekatan penyelidikan fiqh maqasidi dan fiqh saintifik dalam konteks pembangunan fatwa bagi menghadapi cabaran globalisasi.Masyarakat kini berhadapan dengan pelbagai permasalahan baru, kesan daripada perubahan corak kehidupan dan perkembangan sains dan teknologi yang begitu pesat, sekaligus lahir satu era yang dikenali era Siber dalam kerangka yang luas dinamakan globalisasi.Institusi fatwa perlu melakukan istinbat hukum melalui penyelidikan fatwa dalam dua kerangka penyelidikan fiqh iaitu fiqh maqasidi dan fiqh saintifik.Hanya dengan cara demikian sahaja hasil penyelidikan fatwa mampu menyahut cabaran masa kini dan mendahului segala perkembangan yang berlaku dalam menghadapi cabaran globalisasi

Perluasan skop undang-undang Islam di Malaysia: aplikasi dan implikasinya

Since the Parliament of Malaysia passed the Islamic Banking Act 1983 (Act 276), it has been shown that the scope of Islamic law implemented in Malaysia is no longer limited to the scope specified in List II of the Ninth Schedule of the Federal Constitution.Pursuant to List II, the scope of Islamic law is limited to personal law and religious offences only.The Islamic Banking Act 1983 (Act 276) in governing the Islamic banking and finance system has widened the scope of Islamic law.The implementation of an Islamic banking and financial system also has implications for the administrative aspects of Islamic law.The scope of Islamic law, as specified in List II, remains under the State’s jurisdiction.Meanwhile, the Federal’s jurisdiction has the power in governing and regulating Islamic banking and financial matters.This phenomenon also shows the impact of the judicial jurisdiction of the Syariah court and civil court over the scope of Islamic law in Malaysia.In this regard, the Syariah court retains its jurisdiction over the scope of Islamic law enunciated under List II. However, matters pertaining to Islamic banking and finance are subject to the jurisdiction of civil courts.Henceforth, this article seeks to analyze the implications that arise in respect of the administration of Islamic law under the Federal and State Legislature

The managerial prerogative on retrenchment in Malaysia

Retrenchment is a situation wherein the contract of service of the employees are terminated due to surplus in workforce which occurs as a result of economic downturn, reorganization, reduction in production, mergers, takeover, and others. Although retrenchment is to be averted wherever possible, the industrial law recognizes the privilege of an employer to determine the appropriate economic size of its organization.This paper will attempt to discuss the legal aspect of retrenchment in Malaysia as provided in the statutes and guidelines. This paper also focuses on the managerial prerogative in termination of employees in case of redundancy, the recommendations in the Code of Industrial Harmony 1975, the legal effect of Last In First Out and the remedies for the redundant employees in Malaysia

The innovative use of artificial intelligence in the arbitral tribunal: Malaysian perspective

-Arbitration is one of the mechanism for dispute resolution in Malaysia. This institution is not new and works as a complementary to the court system. The current arbitration institution still applying the traditional method in hearing the arbitral process. With the current development of technology, it seems that the adoption of new technology into this institution needs to be considered. Especially preparing this institution facing the era of IR4.0. Artificial intelligence is one of the tool which need to be addressed in the arbitration system. Is it possible to use the artificial intelligence as an arbitrator in hearing process? Whether the existing arbitration framework in Malaysia is ready to adopt such artificial intelligence? This article seeks to scrutinize the using of artificial intelligence into arbitration processes. Also to examine whether the existing arbitration framework is ready to use artificial intelligence in handling disputes especially the legal fraternity. By using library research methodology, this study found that, a lot of advantages of using artificial intelligent in arbitration processes. However in order to adopt artificial intelligent in this institution, several loopholes of the current arbitration framework need to be improved especially the legal aspect. Artificial intelligence able to work as a complimentary to the existing arbitration framework

Private retirement scheme in Malaysia: legal analysis

The Government recognizes the significance of savings to guarantee sufficient savings after retirement.In this regard, the Malaysian Government established the private retirement scheme (PRS) in 2012 as a complementary scheme to the existing pension schemes.PRS seeks to provide alternatives for employed or self-employed Malaysian citizens, to enhance a well-structured and regulated scheme.By using a legal research approach, this study seeks to analyze the existing legislations governing PRS in Malaysia.The study found that the PRS is mainly regulated by Capital Markets and Services Act (CMSA) 2007 and other legislations.There are several legal challenges that can be observed in PRS system.Among them are PRS Guidelines 2012 only provide a minimum standard in relation to the governance policy of PRS providers and CMSA is silent in the matters regarding PRS scheme based on Shariah principles to be offered by the providers

Framework of Malaysian Private Retirement Scheme under Capital Markets and Services Act 2007

The Government of Malaysia established the 1 Malaysia Pension Scheme (SP1M) in 2010 and recognizes the importance of savings from an early age to ensure sufficient savings after retirement. After five years been introduced to the public, it is significance to evaluate the perception of PRS providers in relation to the existing legal framework of the scheme.The objective of the paper is to examine the perception of PRS providers on the legal framework of the private retirement scheme.This is a qualitative research and interviews were conducted amongst providers of PRS.In analysing the data, thematic data analysis was employed to deduce findings from the respondents’ views.The finding shows that majority of respondents agreed the legal framework of PRS is adequate to protect investors and providers. However, there are a few suggestions to improve the legal frameawork and governance of PRS i.e. internal guidelines, provider’s fee and etc