Malaysia’s resonance as global centre for Islamic finance

Over the years, Malaysia has been attracting attention for its innovative practices, robust regulatory framework and commitment to fostering knowledge and expertise in the field 

by SUFEA SALEHUDDIN & NURUL SUHAIDI 

ISLAMIC finance in Malaysia has emerged as a dynamic and influential force, blending traditional financial principles with Islamic ethics and values. Over the years, Malaysia has established itself as a global hub for Islamic finance, attracting attention for its innovative practices, robust regulatory framework and a commitment to fostering knowledge and expertise in the field. 

In this field, several individuals and institutions have played a massive role for Malaysia’s standing in the world. 

Mohd Daud: Visionary Leader in Islamic Finance

Tan Sri Dr Mohd Daud Bakar stands as a towering figure in the realm of Islamic finance, leaving an indelible mark as the founder and executive chairman of Amanie Group. At the helm of Amanie Advisors — a flagship company operating globally — he has been a driving force behind its success, operating in several cities worldwide. 

Mohd Daud’s educational journey is equally impressive, with a Shariah degree from the University of Kuwait in 1988, a PhD from the University of St Andrews in 1993, and an external Bachelor of Jurisprudence from the University of Malaya in 2002. 

His influence extends to key leadership roles as the chairman of the Shariah Advisory Council (SAC) at Bank Negara Malaysia (BNM), the Securities Commission of Malaysia (SC), the Labuan Financial Services Authority and the Astana International Financial Centre (AIFC) in Kazakhstan. 

 

Mohd Daud is also a prolific author with over 40 books in various genres (pic: Media Mulia)

Mohd Daud also holds prominent positions as the chairman of the First Abu Dhabi Bank (UAE) and Permodalan Nasional Bhd (PNB). 

Beyond Malaysia’s borders, Mohd Daud serves as a distinguished Shariah Board Member for various global financial institutions, including the National Bank of Oman, Amundi Asset Management (France), Bank of London and the Middle East (London), BNP Paribas Najma (Bahrain), Natixis Bank (Dubai), Morgan Stanley (Dubai), Sedco Capital (Saudi and Luxembourg) and Dow Jones Islamic Market Index (New York), among many others. 

In the corporate landscape, Mohd Daud holds key roles, serving as the chairman of the Federal Territory Islamic Religious Department (MAIWP) and a member of the PNB Investment Committee. 

His extensive experience also includes board directorships at Sime Darby Property Bhd and chairmanship at the Malaysia Islamic Economic Development Foundation (Yapeim) and he is also a co-founder of Experts Analytics Centre Sdn Bhd and MyFinB Sdn Bhd. 

A testament to his leadership, Mohd Daud currently presides as the eighth president of the International Islamic University of Malaysia (IIUM), where he shapes the future of Islamic education and knowledge. 

His contributions have not gone unnoticed, earning him accolades such as the Most Outstanding Individual award in 2014, bestowed by the late the Yang di-Pertuan Agong Tuanku Abdul Halim Mu’adzam Shah for Maulidur Rasul celebration. 

In 2021, he received the prestigious Darjah Kebesaran Panglima Setia Mahkota (PSM), carrying the title of Tan Sri. 

A trailblazer in the field, Mohd Daud played a pivotal role in developing the first Shariah standard on gold issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). His multidisciplinary knowledge has been instrumental in bridging the application of Shariah principles in modern Islamic finance, contributing significantly to the industry’s advancement. 

Mohd Daud’s impact is not confined to the boardrooms and advisory councils; he is also a prolific author with over 40 books in various genres. 

His writings delve into the interpretation of Shariah rulings by modern scholars and their practical application in the Islamic finance industry. 

Numerous articles authored by him have been published in academic journals and presented at esteemed international conferences. 

Shariah Minds in Islamic Finance was awarded the Islamic Finance Book of the Year 2016

His literary contributions further demonstrate his commitment to knowledge dissemination, with 31 authored books covering diverse genres. Notable among them are Shariah Minds in Islamic Finance, awarded the Islamic Finance Book of the Year 2016, and An Insightful Journey to Emirates Airline Sukuk, recognised as the Best Islamic Finance Case 2017. 

Mohd Daud also shared his insights on the evolution of Islamic finance in Malaysia and the key developments that have shaped its current landscape. 

Malaysia’s Islamic finance journey has been nothing short of remarkable, characterised by its unique genesis and development. 

“By and large, Malaysia Islamic finance is quite unique in its genesis and development. The government and government-related companies have been essential and critical in supporting and enhancing this industry from its nascent beginning.

“This unique ‘invisible hand’ coupled with the visionary leadership of both the government and regulators of the nation have created the amazing Malaysian version of Islamic finance.

“This has not been seen in many parts of the world until recently whereby the same model was copied in one of the biggest Muslim populations of the world. This orientation has expedited the evolution of Islamic finance in Malaysia since the very beginning.

“The not-so-good impact, if any, if the support from the government and government-linked companies (GLCs) were to be lacking, this will potentially hit the compound annual growth rate (CAGR) of Islamic finance in Malaysia,” he added. 

Furthermore, one of the key strengths of Malaysia’s Islamic finance landscape lies in its comprehensive ecosystem for training and education. 

Daud Bakar highlighted individuals from all walks of life, including students, practitioners and the general public, have the opportunity to study Islamic finance in a manner that suits their backgrounds and conditions. 

However, he also acknowledges certain areas that require attention. 

“While Malaysia has excelled in establishing a strong foundation, there is a need for greater emphasis on branding, marketing, media and network development. 

“Additionally, addressing the preparation of Malaysian talents for global roles is essential to enhance the exportability of Malaysian products and expertise in Islamic finance,” he added. 

As Malaysia continues to shape the future of Islamic finance, Mohd Daud encourages a concerted effort to bridge these gaps. 

“With a rich history of success and a commitment to excellence, Malaysia has the potential to further elevate its position on the global stage in the ever-evolving landscape of Islamic finance,” he said. 

Engku Rabiah Adawiyah stands as a beacon of knowledge and leadership

Engku Rabiah Adawiah’s Journey of Excellence

Renowned as a pioneering figure in Islamic finance, Prof Dr Engku Rabiah Adawiah Engku Ali has consistently demonstrated exceptional expertise and dedication to the field. Currently holding the position of professor at IIUM Institute of Islamic Banking and Finance (IIiBF), she stands as a beacon of knowledge and leadership. 

With an illustrious academic background, Engku Rabiah Adawiah obtained her LLB (first-class honours), LLB (Shariah) (first-class honours) and Masters of Comparative Laws (MCL) from IIUM. Her academic journey culminated in 1998 with a PhD in law from the University of Aberdeen, UK. 

As a distinguished academic, she teaches post-graduate students at IIiBF, focusing on Islamic capital market, transactions in Islamic banking and finance, takaful and re-takaful, and contemporary issues in Islamic finance. Her multifaceted research interests span Islamic capital market, Islamic banking and finance, Islamic insurance or takaful, Islamic law of transaction, company law and securities regulation. 

Beyond academia, Engku Rabiah Adawiah has left an indelible mark in the practical realm of Islamic finance. She has served as a member of Shariah committees for various financial institutions and currently holds crucial roles in significant regulatory bodies. Her esteemed positions include deputy chairman for both the Shariah Advisory Council of BNM and the SC. 

Engku Rabiah Adawiah’s influence extends globally, as evidenced by her membership on the Shariah Board of Labuan Re, Amanah Ikhtiar Malaysia and other esteemed organisations. She has also made significant contributions to the advancement of Islamic finance through her role as an independent Shariah advisor for Islamic securities (sukuk) issuance, recognised and registered with SC. 

In recognition of her outstanding contributions, Engku Rabiah Adawiah has received prestigious awards, including the Most Outstanding Individual Contribution to Islamic Finance by Deloitte in 2004 and 2014. As the pioneering lady Shariah scholar in Islamic finance, she has consistently earned a place among the most influential women in the field, further solidifying her impact and leadership. 

Engku Rabiah Adawiah’s journey is marked by a commitment to excellence, a tireless pursuit of knowledge and a dedication to shaping the landscape of Islamic finance. Her achievements underscore her role as a trailblazer and a luminary in the realm of academia and practical application in the field of Islamic finance. 

Inceif: Shaping Islamic Finance 

Established in 2005 by BNM, the International Centre for Education in Islamic Finance (Inceif) has emerged as a global leader in developing talent and expertise in the Islamic financial services industry. The university, mandated to provide postgraduate studies in Islamic finance, stands as a testament to Malaysia’s commitment to fostering knowledge leadership in this specialised field. 

At the core of Inceif’s vision is a commitment to excellence in teaching, research and thought leadership. Bridging the gap between academia and industry, the university’s academic syllabus is carefully structured based on inputs from industry players. This unique approach ensures that students not only gain theoretical knowledge but also benefit from insights grounded in real-world industry experience. 

Inceif boasts a faculty comprising globally respected experts in both Islamic finance academia and the Islamic finance industry. This distinguished faculty, supported by regulators and key industry players, provides students with strong mentoring relationships and ample opportunities for professional development. 

Today, with 1,881 alumni hailing from over 70 countries, Inceif ’s impact extends worldwide. Many of its graduates are actively contributing to the advancement of Islamic finance across various domains, including product development, policy frameworks, regulation, enforcement and innovation. 

The university’s academic programmes, including PhD in Islamic Finance, Industrial PhD, MBA (Sustainable Business), Masters of Islamic Finance Practice, Executive Masters in Islamic Finance, MSc in Islamic Finance and Professional Certificate in Islamic Finance, cater to diverse educational needs.

Inceif’s commitment to quality has been recognised on multiple fronts. In 2019, the university received a Very Competitive (5-star) rating from the Ministry of Higher Education’s (MoHE) Malaysian Quality Evaluation System for University and University College Excellence (Setara). This system evaluates the quality of both private and public universities, including foreign branch campuses.

In a significant milestone, Inceif achieved full accreditation from AACSB International in November 2018. This accreditation, a rare distinction, places Inceif among the top 5% of business schools globally. It is the only Islamic finance university in Malaysia to receive such international recognition.

Further solidifying its position as a top institution, Inceif and its research management centre, the International Shariah Research Academy for Islamic Finance (Isra), garnered prestigious awards in 2021. These include the Best Research House and Best Consulting Service by The Asset Triple A Islamic Finance Awards. 

Isra Consulting Sdn Bhd, a prominent entity in the realm of Islamic finance, operates as a subsidiary of the International Shariah Research Academy for Islamic Finance (Isra). 

Isra — an esteemed research institution boasting a strong network of academics and industry practitioners — paved the way for the establishment of Isra Consulting. This consulting firm was created to meet the growing demand for specialised consultancy, training and advisory services within the Islamic finance industry. Recognising the abundant opportunities in this domain, Isra Consulting was subsequently founded. Presently, it operates as a subsidiary of Inceif University, thereby augmenting its capabilities and expanding its reach. 

At Isra Consulting we collaborate with Inceif University, says Mohamad Akram

In a significant development within the realm of Islamic finance, Datuk Prof Dr Mohamad Akram Laldin stands as a distinguished figure, currently serving as the ED of Isra. 

Mohamad Akram Laldin embarked on his journey in Islamic finance after completing his PhD in Principles of Islamic Jurisprudence (Usul al-Fiqh) from the University of Edinburgh in 1995. Armed with a BA Honours degree in Islamic Jurisprudence and Legislation from the University of Jordan, he has since become a prominent figure in the field. 

Before assuming his current role at Isra, Mohamad Akram Laldin served as an assistant professor at the Kulliyah of Islamic Revealed Knowledge and Human Sciences, IIUM. His international exposure includes a stint as a visiting assistant professor at the University of Sharjah, Sharjah, United Arab Emirates, from 2002 to 2004. 

Currently, he holds key positions in esteemed organisations, including being a member of the Shariah Advisory Council of BNM, the Shariah Advisory Committee of Employees Provident Fund (EPF) and the chairman of the Islamic Advisory Board of HSBC Insurance Singapore. He serves as a Shariah advisor to various entities, such as ZI Shariah Advisory Malaysia, Yassar Ltd (Dubai), Dar al-Takaful Dubai, and more. His contributions extend globally, with roles on Shariah boards in the Middle East, the UK, Central Asia, Africa and other parts of the world. 

His contributions to Islamic finance have been showcased on both national and international platforms. He has presented numerous papers at conferences such as Accounting and Auditing Organisation of Islamic Financial Institutions (AAOIFI) Bahrain, Islamic Financial Services Board (IFSB) Kuala Lumpur, and International Islamic Financial Market (IIFM) Bahrain, gaining exposure and insights from renowned scholars worldwide. His international exposure led to appointments on Shariah boards in various regions, further solidifying Malaysia’s influence in the global Islamic finance landscape. 

The fact that he has served on the Shariah boards of several local banks — Eon Bank Malaysia Bhd, the Takaful Co and HSBC Amanah — demonstrates the commitment he has to creating the Islamic banking sector from the ground up. Significantly, his participation in important national boards and his nomination to BNM’s Shariah Advisory Council demonstrate his impact on the country’s financial policy. 

Mohamad Akhram Laldin recounts that the journey started when Isra received numerous requests from market practitioners for consultancy, training and advisory services. 

“We got the request from quite a number of market practitioners for us to provide consultancy, training and advisory services for the industry. 

“From there, Isra Consulting was established and we believe that there are a lot of opportunities in the area of consulting where we can play our role in Islamic finance especially,” he told The Malaysian Reserve (TMR). 

Mohamad Akram Laldin said for now, Isra Consulting has three main departments — consultancy, advisory and training — encompassing varied areas from banking to capital market as well as takaful. 

“We also offer our consultancy services to companies that want to start their business with Islamic principles or convert their existing business to Islamic practices. We provide both opportunities and guidance, offering advice to assist them. 

“On the advisory side, typically, when a company or an organisation already has an Islamic business, they require a constant advisor to guide them on day-to-day operational matters related to Shariah,” he said. 

One of the key objectives of Isra Consulting is to position itself as the leading provider of consulting services, both in Malaysia and internationally. Concurrently, the aim is to offer innovative solutions across all aspects of Islamic financing. 

“Of course, I mean, we would like to be the premier consulting service provider, not only for Malaysia, but also for the global market. And at the same time, we wanted to provide an innovative solution for our client in all the areas related to Islamic finance. 

“I believe our strength lies in being the only consulting company backed by a university. At Inceif University, our faculty members work hand in hand with Isra Consulting to deliver all the services we provide — whether it’s consulting, advisory, or training. 

“And we have renowned Shariah scholars that are also together with Isra Consulting in providing our services,” he said. 

Isra Consulting is actively engaged in four major areas, emphasising its dedication to excellence in Islamic financing. These areas include developing legislative and regulatory frameworks for Islamic finance, conducting audits and reviews in accordance with Shariah law, and product structuring, all of which fall under the first category of consulting services. 

The organisation also screens stocks for Shariah compliance, provides advice on sukuk structuring and offers Shariah endorsement, and certification services. 

In addition to supporting universities with curriculum creation and other Shariah-related advising and consultancy tasks, Isra Consulting acts as an external Shariah advisor, sharing its knowledge with businesses and other organisations. 

On top of that, Isra Consulting provides specialised in-house training programmes, including its flagship initiative, the Islamic Finance for Board of Directors programme. This programme is designed to equip board members of banks with essential knowledge. 

The organisation offers translation services, smoothly converting texts between Arabic and English, using their in-house expertise to fulfil various linguistic requirements. 

Isra Consulting and Inceif University Collaboration

What sets Isra Consulting apart from its competitors is how it works in tandem with Inceif University, making use of the latter’s formidable and esteemed resources. 

By collaborating on a number of initiatives, Isra Consulting and Inceif University are able to provide the market invaluable insights in the area of thought leadership. 

One such event is the IF360, which brings united academics, researchers and industry professionals for a live webinar and in-person gathering to discuss and share ideas on a variety of themes. 

This inclusive discussion extends to different segments of the audience, including students at Inceif University, creating a dynamic and enriching environment. 

“At Isra Consulting, we don’t operate independently; instead, we collaborate with a very strong and reputable university, Inceif University. All the resources of Inceif University are also at our disposal, and this is one of the strengths that sets us apart from many other similar service providers out there,” Mohamad Akram highlighted. 

Isra Consulting is at the forefront of transformative initiatives in Islamic finance, with a focus on collaborative projects and ongoing research. The organisation is dedicated to highlighting innovative projects and the latest research in the field dedicated to Maqa’s Edu Shariah and Social Welfare. 

This initiative involves collaborating with industry stakeholders to enhance the application of Maqa’s Edu Shariah — an essential aspect for fulfilling the objectives of Islamic finance. 

The collaborative effort extends across entities in Malaysia and beyond, exemplified by a partnership with the UK Islamic Finance Council to develop a comprehensive framework for Maqa’s Edu Shariah and its practical implementation. 

“As all of us know that Maqa’s Edu Shariah or fulfilling the objective of Islamic finance is very important. So, we are working with several entities both in Malaysia and outside Malaysia. 

“For example, we are working with UK Islamic Finance Council to develop a framework of Maqa’s Edu Shariah and how it can be implemented on the ground” added Mohamad Akram Laldin. 

Shaping the Future: Usim’s Holistic Approach to Islamic Education and Finance

Universiti Sains Islam Malaysia (Usim) has rapidly emerged as a key player in Islamic education, situated atop a tranquil hill overlooking Nilai in Negri Sembilan. 

The university’s commitment to a holistic education model unites revelation sciences (Naqli knowledge) with contemporary sciences (Aqli knowledge), offering a progressive Islamic perspective that sets it apart on the global stage. 

Usim’s commitment to excellence in Islamic finance is further underscored by the launch of the White Paper on Shariah Audit. This policy paper, unveiled by Malaysian Institute of Accountants (MIA) president Datuk Bazlan Osman emphasised the critical role of Shariah compliance processes in Islamic financial services. 

Led by Prof Dr Zurina Shafii and a team of esteemed researchers from Faculty of Economics and Muamalat, the policy paper delved into Shariah governance structures and robust audit practices. 

It provides an overview of current regulations, practices and policy recommendations related to Shariah audit in Malaysia’s Shariah-based institutions. 

The collaborative research, initiated in 2020 under a matching grant scheme, engaged stakeholders from Islamic banks, takaful institutions, Islamic capital market entities, Islamic cooperatives, public sector Shariah-based institutions and public trust entities. 

With 124 participants across various round-table discussions, the research aimed to identify and enhance current practices in Shariah audit, addressing the needs of diverse sectors within Malaysia’s Islamic finance landscape. 

Bazlan highlighted the policy paper’s relevance in addressing the current imperative for Shariah audit assurance, emphasising its potential impact on strengthening Shariah governance, particularly for publicly listed companies and public trust entities with Shariah Committees. 

Prof Zurina expressed her pride in Usim’s recognition by MIA, affirming the institution’s expertise and dedication to conducting impactful research in the field of Shariah audit. The policy paper launch marked a significant milestone, contributing valuable insights to enhance governance and Shariah assurance, ensuring sustained compliance with Shariah principles. 


  • This article first appeared in The Malaysian Reserve weekly print edition