Islamic Banking in Malaysia: Analysis

Tan Sri Dr. Mohd Munir Abdul Majid, Chairman of Bank Muamalat and Chairman of ASEAN-BAC Malaysia talks about the Islamic banking in Malaysia.

He says, “As far as Islamic banking in Malaysia, our bank is a small bank and primarily a retail bank, but we make an equity base of RM1.5 billion and profit of over RM200 million. We are a fully-fledged Islamic bank, and there are only two such banks in Malaysia, but what is the difference? Our sharia committee of scholars are the most stringent of sharia scholars, and make sure our products are ensured Islamic. However, that is a product that you offer – you’re not offering a religion: be better than thou, don’t be holier than thou. Be better than other people’s products, in terms of cost, Islamic characteristics, etc.”

“When the market sees costs that are lower than the costs of other products, they buy in; there was research that showed that 50% of the customer base of Islamic products are non-Muslims in Malaysia. People see when your product is a lower cost, and that you give special attention to them. This is the ethical aspect, that you give special attention to them. We have a staff strength of a little over 2,000 and are able to get close to our customers. These kinds of things make people more comfortable with you; and we also deal more with the small man, so our customer base in retail and consumer banking are those who earn RM3000-5000,” he said.