Islamic finance regulations in Malaysia: a macro maqasidic approach
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The research aims primarily to identify the main macro objectives of Shari'ah (macro maqasid) that the regulators are supposed to imbue in the Acts and guidelines governing Islamic Financial Institutions. Focusing on Malaysia, the research starts with the conceptual framework of Islamic finance regulations, which addresses the objectives enshrined in the Acts and guidelines promulgated. After exposing the overall environment of Islamic finance in Malaysia, the research discussed some obstacles of regulations, namely harmonization between Shari'ah and law and its potential impact on the realization of maqasid al-Shari'ah. In order to give a glimpse on further obstacles, the research briefly discussed the governance framework, the prudential and risk management regulations, and the Shari'ah standards in terms of maqasid compliance. The research found that the Malaysian expertise in Islamic regulation is very commendable but no free from criticism as some are deemed maqasid non-compliant. More importantly, the research delineated the macro maqasid entrusted with the regulators to observe and imbue in the regulations of Islamic finance. The research found that Islamic finance regulations are not completely independent from conventional ones, let alone the independence from international regulatory regimes and practices. This should call for the propounding of a theory of maqasid specific to Islamic finance focusing on regulations at macro-economic level. The study recommends the operationalization of the macro maqasid at the regulatory level first before operationalizing them at the level of Islamic financial Institutions.
Macro maqasid , Regulations , Central bank , Shari'ah compliance
Soualhi, Y., & Bouheraoua, S. (2018). Islamic finance regulations in Malaysia: a macro maqasidic approach. Al-Shajarah: Journal of the International Institute of Islamic Thought and Civilization (ISTAC), (Special Issue: Islamic Banking and Finance 2018), pp. 307-336.