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Actions are judged by Intentions

February 27th, 2020 |

*** Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of ISRA

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Islamic Fintech: Opportunities and Challenges

July 1st, 2020 | Digitalization has changed the structure of the Islamic moral economy and spurred the development of the overall Islamic digital sphere, which includes Islamic financial services. Automation, disintermediation, decentralization and blockchain brought by technological advancements have specifically participated in the establishment of strong and resilient financial technology (fintech). However, despite the great changes and opportunities that Islamic fintech brings to the Islamic economic and financial systems, mismanagement of this nascent area may hinder the growth of the overall ecosystem. This article examines some issues and challenges facing Islamic fintech and its prospects.

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The Role of Islamic Social Finance in Cushioning the Impact of COVID-19: The Case of Zakat

May 28th, 2020 |

Governments around the world are doing its best in dealing with the coronavirus disease (COVID-19) outbreak with most countries implementing partial or full lockdown as a mitigative step to control the spread of the disease. In Malaysia for example, the Government of Malaysia (GOM) initiated the Movement Control Order (MCO) on 18 March 2020 and has since opened up the economy sector gradually through conditional MCO from 4th to 18th May. The COVID-19 pandemic has had a huge impact on the country’s economy and the Governor of Bank Negara Malaysia (BNM), Datuk Nor Shamsiah (2020) contends that amid the extended MCO, the unemployment rate will likely surpass the bank’s earlier forecast of 4%.

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Reporting of Shariah Non-Compliance Events: The Case of Some Islamic Financial Institutions in Malaysia

January 31st, 2020 |

Shariah non-compliance (SNC) refers to the failure of Islamic financial institutions (IFIs), particularly Islamic banks and takaful operators, to comply with the Shariah resolutions issued by their respective Shariah committees and/or the Shariah Advisory Council (SAC) of Bank Negara Malaysia (BNM). SNC falls under the framework of operational risk as SNC risks arise from insufficient or failed internal processes and procedures in the system or the errors of people conducting those procedures. SNC incidences may expose IFIs to unfortunate implications. If no proper remedial actions are taken, such incidents might breach the Islamic Financial Services Act (IFSA) 2013, exposing the responsible persons to fines and/or imprisonment and the institution to fines and/or revocation of its license, as outlined in Section 28 (5). This article briefly highlights some policies and guidelines for mitigating SNC risks, issued by Bank Negara Malaysia (BNM) in its capacity as the regulator. It then explains how some IFIs in Malaysia have complied with those guidelines in reporting their SNC incidents.

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