Investment Policies in asean islamic Countries

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Investment Policies in ASEAN Islamic Countries:

Learning From Indonesia Malaysia and Brunei1

Mukti Fajar ND2

  1. Introduction

Facing the upcoming 2015, ASEAN countries have been preparing their self to face the ASEAN Economic Community, a regional pact that will unite all of ASEAN community into a big economic market. Each country is doing their best preparing their both internal and external aspects3. Internal aspect including the preparation of their superior national products and services, as well as preparing for the supported policies and economic-related administration procedures. Whereas, the external aspect is covering the inter-country survey process to study other’s countries economic situation and to know more about non-business matter such as government policies, political situation, as well as socio-cultural factors since these factors will affect the consumption pattern and market transaction process in society4. In more broaden of view, these factor will also affect the local government policies and industrial sectors.

This paper will be more focused on a review in the relationship between religious aspect and government policies as well as its effects on consumption and transaction pattern in ASEAN countries which’s their Moslem population is quite big such as Indonesia, Brunei and Malaysia.

Among ten ASEAN countries with total population reach 629.379.191 people, 281.204.233 people among it are Moslem community who live in Indonesia, Brunei and Malaysia. Indonesia with its population which reaches 251.160.124 people5, 80% of them are Moslem community. This huge amount of people obviously becoming a huge economic market in ASEAN region6 with total consumption amount up to IDR 360,000 T (USD 36 T) by 20307. It is must be interesting to analyze the data from the aspects of the policy and consumption patterns as well as its transaction.

This paper will also discuss about investment topic which seen from Islamic perspective in Indonesia with some comparison with Malaysia and Brunei, specifically about some of these issues below:

  1. Principles of Islamic Law as a guidance for Moslem people in their actions

  2. Indonesia’s investment regulation (as well in Malaysia and Brunei) in Islamic perspective

  3. What kind type of investment in Indonesia (as well in Malaysia and Brunei) that suitable with Islamic perspective?

Therefore, the author will explain more about the issues mentioned above based on the Laws and also from qualitative as well as quantitative data.

  1. Discussion

  1. 5 Principles of Islamic Law (Sharia)

As a Moslem, it is an obligatory to live based on the guidance from the Holy Al Quran as well as from Al Hadist The Prophet Muhammad, The Messenger of Allah. This guidance is well known as Syari’ah or Islamic Laws. Syari’ah can be defined as a law which set by Allah that covers all of aspects in human life, strictly applied and uncompromised8. In general, Al Quran and Al Hadist give a comprehensive and detail guidance for every Moslem, especially about (1) Worship, a way to worship Allah as a Creator by human being as His creatures. (2). Mua’amalah, is an interaction between human being including political interactions as well as criminal and civil laws, which explain the way of a Moslem do their relationship with other human being in the world. Furthermore, a Moslem must follow five principles of Islamic Laws as a barrier from the good and bad.

Five principles of Islamic Law9:

  1. Wajib (Obligatory), is an obligatory duty, the omission of which is punishable

  2. Sunnah (Desirable), is an action which is rewarded, but the omission of which is not punishable

  3. Mubah (Indifferent), is an action which is permitted and to which the law is indifferent

  4. Makruh ( Undesirable), is an action which is disapproved of, but which is not a punishable offence, thought the omission is rewarded

  5. Haram (Forbidden), is an action which is absolutely forbidden and punishable, and the omission is rewarded.

Those five principles are embedded in every aspect of Moslem’s live without any segregation (non-secularism). Every Moslem tends to do any kind of action which are Halal, Sunnah, and Mubah, while leaving out any action which is Makruh or Haram. This condition must be well understood as this is also becoming a main consideration for a Moslem while doing any business activity.

Besides Al Quran and Al Hadist, there is also a law called Ijtihad, which need to be obeyed as well. Ijtihad, generally defined as a process of legal reasoning and hermeneutics through which the jurist-mujtahid (Ulama) derives or rationalizes law on the basis of the Al Quran and Al Hadist. Ijtihad plays a role as supplementary yet important law for anything which is still unclear (Subhat). Technically, Ijtihad usually served as a Fatwa. In Indonesia there are many Ulama (or Ulama council) from many Islamic organization such as Muhammadiyah or Nahdathul Ulama. Apart of that, there is also Majelis Ulama Indonesia (Indonesia Ulama Council), well known as MUI, which had been formally established by Indonesia Government since July 26th 1975. MUI has some duties such as :

  1. As the heir of Prophets’ roles (Warasatul Anbiya)

  2. As a Mufti ( the one who gives the fatwa)

  3. As a mentor and servant of the people

  4. As a reformer organization

  5. As a enforcer of Islam Rules ( amar ma’ruf nahi munkar )

The MUI’s Ulama often hold a discussion and research on an issue and issued some fatwas afterward whether that thing is halal, sunnah, mubah, makruh or haram. A fatwa has a big scoop including worship procedures, entertainment criteria, religious sects, decideng the beginning of Ramadhan as well as industrial products. Even though these fatwas do not have binding force as well as formal state law, these fatwas are quite influence to Indonesia Moslem’s behavior. Besides the fatwas, MUI also has responsibility to issue the Halal Certificate for industrial products, both goods and merits10.

  1. Islamic Investment Regulations in Indonesia

Since its Independence Day on August 1945, although the historical record shows how strong the spirit of the Founding Fathers to make Indonesia as an Islamic state by entering the Islamic principles into the constitution which says: "The obligation to carry out Islamic law for followers”, Indonesia never been acknowledge as an Islam country. However Indonesia has the largest Muslim population in the world, amounting to about 210 million, or more than 80% of the population of Indonesia. Indonesian legal system11 also recognizes the existence of Islamic law.12

In general, the law and policy of investment in Indonesia is not explicitly say that the investment must be in accordance with Islamic law, although substantially there are considerations of sharia. According to the Investment law Number 25 year 2007 and Government Regulation No. 36 Year 2010 on the list of permitted and prohibited investments for foreign investment, in principle, all business should be invested in Indonesia except prohibited. Some of the prohibition is because it was considered to have strategic value, and environmentally harmful or haram in Islam.

Based on Presidential Regulation No. 36 Year 2010 on List of Closed and Open Investments there are just 6 barred sectors namely as follow13:

  1. Agriculture ( cannabis cultivation)

  2. Forestry (prohibited species and marine material making)

  3. Industrial sector (alcoholic beverages)

  4. Transportation (ground terminal)

  5. Communication (Satellite providers)

  6. Tourism ( museums)

Cannabis cultivation and alcoholic beverages are banned since it is categorized as haram in Islamic sharia.

Moreover in some provinces or districts with powerful Islamic movement, regional regulations are laden with Islamic values. Between the years 2004 -2009, there are fifty two Local Regulation have been published in various regions. The regulated issues are: gambling and prostitution prohibition, dress code for employee in public, prohibition of hotel guests who are not married, prohibition to open a restaurant in the daytime during month of Ramadan, a ban on selling alcoholic beverages and open places of entertainment and others14.

In genereal. Malaysia and Brunei are having similar policy. For things that are prohibited by Islamic law there will be restrictions, although not banned altogether. However, there is an interesting phenomena about gambling business in Genting Higland Malaysia since it is generally known, gambling is something that is forbidden by Islam. It is turned out that gambling in Malaysia are conducted by the Chinese.

Lim Goh Tong , founder of Genting Group ( died on October 23, 2007 ) was very popular in Malaysia . He was considered successfully changed the juggle hills " Genting Highlands " which originally was nothing into one of the best resort and tourism center of the most successful casino in the world. .After his death, this family business is run by his son Lim Kok Thay. Genting Group leader is positioned as one of the richest tycoons in the world with total fortune of USD 360 million or IDR3.3 trillion . While the widow Lee Kim Hua , amassed a fortune of up to USD 4 billion or IDR 37 trillion . In March 1969, the Prime Minister of Malaysia Abdul Rahman announced the licensing of the senior Lim to build a casino . Genting Higlands growing rapidly with 14 million visitors annually. Because of the gambling business, the relationship between the government and Genting Higlands is up and down. In fact, Lim must renew licenses every three months. In every general election, the sin of gambling always be an outcry. In 1983, the Sultan of Pahang into the extent that prohibits Muslims with threats to three months in prison. However, this gambling business also give beneficial effect to Malaysia government. The Malaysia government earned USD 400 million annually from this gambling business, particularly from Genting15.

Another thing that needs to be understood is about the investment and Moslems are the employment relationship. The Labor Law No. 13 of 2003 included some of the basic principles of Islamic Sharia into the working relationship between the company and employees. In Article 80, it is mentioned that "Employers are obliged to provide sufficient opportunities to workers / laborers to carry out worship required by his religion”, As an example, since a Moslem need to pray 5 times a day (Fajr, Dhuhr, Asr, Maghrib and Isha), there is a need for them to have a break to do the praying at Dhuhr and Asr time which is still within the work hours. Likewise Moslems must perform once in a lifetime pilgrimage to Mecca for the duration of 20-40 days16. Meanwhile, according to Article 93 paragraph (2) letter (e) it is mentioned that during the worship, the company should not be cutting salary. In Article 153a quo paragraph 1 letter (c) it is mentioned that for employees who leave the work to do their worship cannot be dismissed. In Indonesia there are also many religious-related national holiday, as many as 12 days per year which is obviously considered as ineffective for business.

  1. Investment Sectors that Suitable with Islamic Principles

In this section we will discuss the two strategic factors things related to Islamic investment policy: the Islamic banking and products (services or goods) with a Halal label.

  1. Islamic Banking

In the last decade, there are many sharia related investment activities have been growing in Indonesia, such as Islamic Banking, Institute of Islamic insurance, exchange transactions, such as stock trading and Islamic bonds. The statistical increasing of the sharia business can be seen from many data.

In the period between 2007-2013, Islamic banking business experienced a tremendous increase from 782 bank branches into 2872 branches organized by 195 Bank, which consists of Sharia Bank (Islamic Commercial Bank), Sharia Unit (Islamic Business Unit) from commercial banks and rural Sharia Banks (Islamic Rural Bank). By absorbing up to 40,928 employees, this business produced the net profit of IDR 2,514,000,000,000 for Islamic Commercial Banks and IDR 65,313,000,000 for the Rural Islamic Bank17.

These figures below show the trend of increment in sharia business based on the assets ownership, customers funds and the amount of financing provided. These data also can provide confidence business prospects of Islamic banking in Indonesia

Figure 1. Graph of Depository and financing assets18

Figures 2. Graph of non-performing loan19

In addition, the Indonesia government has issued some Islamic banking related laws as folow:

      1. Law Number 21 Year 2008 Concerning the Banking Sharia;

      2. Law Number 19 Year 2008 Concerning Sharia Securities

      3. Law Number 3 Year 2006 Concerning Religious Courts to Dispute Islamic Economics;

and many more supporting regulations Later, this paper will discuss some comparison between the operation of Islamic banking in Indonesia with the ones in Malaysia and Brunei.

Malaysia is the forerunner in Islamic banking. The world is looking to this country and trying to learn from its experience in developing modern and sophisticated instruments which are said to be Shariah compliant. This is the first country in the world to introduce and promote an Islamic inter-bank money market to link all the market players and promote short-term liquidity. The main contributing factor leading to its success is the undeniable support of the Government. To further spur its growth, Bank Negara Malaysia (BNM) in 2001 introduced the Financial Sector Master Plan (FSMP), which includes the aim of a 20 percent market share for Islamic Banking and Takaful vis-à-vis conventional by 2010. In Malaysia currently there are two Islamic banks, Bank Islam Malaysia Berhad (BIMB), which commenced operation in July 1983 and Bank Muamalat Malaysia Berhad (BMMB) in 1999. They were established by virtue of an act of Parliament; the Islamic Banking Act 1983 (IBA), which is considered as the beginning of the effort to assimilate Islam into the Malaysian economic system20.

At present, Malaysia is one of the most developed Islamic banking markets in the world. It is growing at an annual rate of 18-20% and its assets reached USD 65.6 billion. This is supported by comprehensive financial infrastructure, continual product innovation, adoption of global best practices, and strong emphasis on human capital development.

Currently, there are significant number of full-fledged Islamic banks operating in Malaysia including several foreign owned entities; conventional institutions who have established Islamic subsidiaries and also entities who are conducting foreign currency business.21

Due to the progress of the banking business in Malaysia, the government passed the Law of Malysia Act 759 Islamic Financial Services Act of 2013, which not only regulates the Islamic Bank, but also Islamic Insurance and Islamic Money Market And Islamic Foreign Exchange Market. In Malaysia, As far as Islamic banking transactions and legal documentation is concerned, it is submitted that the following laws are relevant and applicable: (i) Valid according to Islamic law; (ii) Compliance with Civil/Federal laws as well as procedural laws; (iii) State law; and (iv) English Common law.

Nowadays, the circumstances of the Islamic banking business in Malaysia has experienced very good growth. Its assets reached MYR 494.6 billion or approximately 23, 8% of the total banking system. Provide financing for MYR 315 billion, or about 25.8% market share. Pooling the public funds of MYR 386.2 billion or 25.6% market share and is expected to manage 40% of financing in 202022.

His Majesty The Sultan of Brunei initiated the formation of Islamic bank in Brunei. In his royal speech to the Islamic Religious Council Meeting held in September 1990, he stressed that the establishment of an Islamic bank is important because it is a ‘fard kifayah’, obligation for each Muslim country and Negara Brunei Darussalam. This command initiated the beginning of many more meetings organized by the Islamic Religious Council which resulted in the setting up of a committee known as Formation of Islamic Bank Committee. Brunei’s first significant commitment to developing a complete Islamic system began in September 1991 with the official opening of Tabung Amanah Islam Brunei (TAIB)23. Two years after establishing the trust fund, Brunei officially opened its first fully-fledged Islamic commercial bank called ‘The Islamic Bank of Brunei Berhad’ (IBB)24. Domestic Islamic and conventional banking activities in Brunei darussalam are governed by the Islamic banking Act 1999 and the Banking Order 2006 under supervision of the ministry of Finance, Financial Institution Division25.

Managing Director of Bank Islam Brunei Darussalam, Javed Ahmad, said the market share of Islamic banking in Brunei is expected to increase to 60 percent from current levels of 40 percent. The growth of the Muslim population in the Middle East, North Africa and Asia became the main driver of the increase in demand for Islamic financial services.From the banking side, the Sultanate of Brunei obviously get benefit, especially after launching the first Sukuk (bonds), the short-term government property. This Sukuk (bonds) Ijarah worth BND 150 Billion or USD 111 Billion for the three-month certificate in April 200626.

The blooming of Islamic business in Indonesia, Malaysia and Brunei is due to the awareness of the Muslims to use the financial services and transactions which Sharia compliance as the system of confessional commercial banks is considered as usury (Riba).

In principle, Islam gives freedom to his people to do any kind of business that is lawful but prohibit transactions that have the element of Riba (usury). 27".... Whereas Allah permitted trading and prohibit usury ..."28. Riba is any efforts to augment the amount of principal or capital assets unlawful, such as giving loan interest or additional payments for the suspension. In principle, Islam prohibits Riba because it adds to the property subject without any real business transactions29.

The main points of the rationale for the prohibition of interest in Muslim countries may be listed as follows30:

        1. Transactions based on interest violate the equity aspect of economic organization. The borrower is obliged to pay a pre-determined rate of interest on the sum borrowed even though he may have incurred a loss. To insist on payment of a pre-determined rate of interest irrespective of the economic circumstances of the borrowers of money is against the Islamic norm of justice.

        2. An interest-based system discourages innovation, particularly on the part of small-scale enterprises. Large industrial firms and big landholders can afford to experiment with new techniques of production as they have reserves of their own to fall back upon in case the adoption of new practices does not yield a good dividend. Small-scale enterprises hesitate to go in for new methods of production with the help of money borrowed from banks because the liability of the banks for the principal sum and interest have to be met, irrespective of what the results might be and the fact that small-scale enterprises usually have little reserves of their own.

        3. In an interest-based system, banks are only interested in recovering their capital along with interest. Their interest in the ventures they finance is therefore strictly limited to satisfying themselves about the viability and profitability of such ventures from the point of view of the safety of their capital and the ability of the venture to generate a cash flow which can meet the interest liability. Since the return the banks get on the capital sum lent by them is fixed and is not linked in any way to the actual profits of the ventures to whom they lend, there is no incentive for the banks to give priority to ventures with the highest profit potential.

        4. An interest-based system dampens investment activity because it adds to the costs of investment. If interest rates are raised to contain monetary demand in situations where excessive fiscal deficits are fuelling inflation, private investment receives a severe setback leading to “stagflation”. This has actually been the experience of a number of developed countries in recent years.

        5. The interest-based system is security oriented rather than growth oriented. Because of the commitment to pay a pre-determined rate of interest to depositors, banks, in their lending operations, are mostly concerned about the safe return of the principal loan along with the stipulated interest. This leads them to confine their lending to the already well-established, big business houses or such parties as are in a position to pledge sufficient security. If they find that such avenues of lending are not sufficient to absorb all their investable resources, they prefer to invest in government securities with a guaranteed return. This exaggerated security orientation acts as a great impediment to growth because it does not allow a smooth flow of bank resources to a large number of potential entrepreneurs who could add to the gross national product by their productive endeavour, but do not possess sufficient security to pledge to the banks to satisfy their criteria of creditworthiness.

Hence, in Islam contractual relations in business must be in accordance with sharia by leaving usury. Some examples of Sharia contract are31:

    1. Mudharaba Contract: A contract between a capital provider and an entrepreneur or a fund manager, whereby the entrepreneur or fund manager can mobilize the funds of the former for its business activity within the Sharia guidelines. Profits made are shared between the parties according to a mutually agreed ratio.

    2. Musharaka Contract: A contract between two parties whereby both parties provide capital and both may be active in managing the venture. Losses are shared on the basis of how much capital has been contributed. Profits are shared in any way the partners decide.

    3. Murabaha Contract: The sale of goods at a price, which includes a profit margin agreed to by both parties. The purchase and selling price, other costs, and the profit margin must be clearly stated by the seller at the time of the sale agreement.

  1. Halal label

Another issue related to investments in Muslim countries is the halal labeled products. Consuming the halal labeled product, both goods and services are is obviously more convenient for Moslems. Halal here is defined as lawful products, both the materials as well as the production process. Some of unlawful materials are32:

  1. Whole part of pig and its products

  2. Dogs; meats and saliva

  3. Canines such as tigers, snakes, rats

  4. Amphibians such as frogs and crocodiles

  5. Blood and carrions

  6. Slaughtered animals which is offered for other than Allah

  7. Khamr (alcoholic beverages)

The recent fatwa from MUI considered cigarettes is categorized as haram products, but there is still a debate among the scholars.

Beside the halal criteria, a product is must be considered thoyibah as well. Thoyibah means clean making process (hygiene) and obtained in the lawful ways.

To further convince the consumer that the goods or services it halal, Indonesia manufacturers can apply to Research Institute for Food, Drug and Cosmetic of of Indonesian Ulama Council (MUI LPPOM) for the halal certificate33. In Brunei the halal certifate can be obtained by applying to the Religious Council of Brunei Darussalam34. While certification of halal in Malaysia can be submitted to the Department of Islamic Development Malaysia (JAKIM) by following the scheme of Malaysian Standards MS 1500: 200435.

Below are several reasons why a product should use halal label36:

  1. Consumer confidence – it allows the consumers to make an informed choice of their purchase

  2. Competitive advantage – manufacturers can use it as a marketing tool to secure bigger market share as halal food is suitable for both Muslims and non-Muslims. At international level, it can enhance the marketability of the products especially in Muslim countries.

  3. Quality – it indicates that the food product not only fulfils halal requirements, but also strict hygiene practices

There is an interesting cases in Indonesia related to halal products, the Ajinomoto case. PT Ajinomoto Indonesia is a producer Ajinomoto brand food seasoning. PT Ajinomoto headquarters is located in Japan which is one of the 36 largest food and beverages company in the world which produces seasonings, cooking oils, foods and pharmaceuticals37. The Ajinomoto cases blew up in 2001, and had shook Muslim community due to the MUI fatwa which forbids this brand because it is considered containing lard. This situation obviously led Indonesian Moslems’ anger. PT. Ajinomoto actually already had a halal certificate from MUI, but it was expired in June 2000. Unfortunately, PT Ajinomoto did not reapply for a new certificate to the MUI, they even changed the raw material, using extracts bactosoytune which is suspected containing lard. To overcome the tranquility and anxiety that were already widespread in the community, PT Ajinomoto simultaneously recalled all Ajinomoto seasoning products within 3 weeks starting from January 3, 2001 with total amount of 10 thousand tons. As a result, PT. Ajinomoto had to bear the losses by giving compensation to the traders of IDR 55 billion. PT. Ajinomoto also apologized to all Indonesian people and declared that the entire new stocks of Ajinomoto seasoning products may only be marketed after obtaining a new halal certificate from MUI .

  1. Conclusion

From the discussions above we can conclude some important points:

  1. Muslims have strong guidelines in his life, namely the Qur'an, Al-Hadith and Ijtihad. These guidelines strongly influence their behavior in life activities including their consumption and trading behavior.

  2. Regulation of investment in Indonesia has been clearly defined in the Investment Law No. 25 of 2007 and Government Regulation No. 36 Year 2010 on the list of open and closed investment for foreign investment. The regulations do not strictly prohibit the investment due to strategic and security reasons. But, in fact, some restrictions substantially due to the Islamic principles, which is same as what happen in Malaysia and Brunei.

  3. The strengthening of the Moslems belief affect businesses based on Islamic law (sharia), such as Islamic banking and halal-labeled products. Moslems tend to choose a business which shall be in accordance with sharia and away from things that are forbidden in Islam.

1 This paper will be presented at International Seminar “Investment Policies in ASEAN Islamic Countries” , University Chamber of Commerce , Bangkok Thailand April 24 2014

2 Doctor of Economic Law, Associate Professor, School of Law University of Muhammadiyah Yogyakarta, Director of The Center for Law and Social Welfare Studies, Director of Quality Assurance Board University of Muhammadiyah Yogyakarta

3 Mukti Fajar ND, AEC : Buntung atau Untung ? (fortune or mis fortune ? ) , Kedaulatan Rakyat News Paper, August 14th 2012

4 The relationship between religion and economic market can affected each other, such as rituals and religious holidays has becoming a promising business commodities in Indonesia. See: Zulfadli, Religion, Market and Life Style, also see: Khamami Zada, Faith Revolution , Modernity and Market , Jurnal Jamaah Islam Liberal

5 This data was taken from Indonesian Board of Statistic Centre (Badan Pusat Statistik) Indonesia in July 2013

6 Indonesia is not an Islamic country but a secular one which has Pancasila as its state foundation which adheres to the belief of on God

7Trade Minister : People Consumption Increasing Tingkat Konsumsi Masyarakat Indonesia Meningkat (Minister of Trade : Consumption level of Indonesia citizen was increasing) ,

8 Werner Menski ,Comparative Law in Global Context , Cambrid University Press : 2008 , p 395

9 Angelo M. Vernardos, Islami Banking & Finance in South East Asia : Its Development & Future , Singapore, World Scientific Publishing ; 2005 , p 27


11The legal system in Indonesia consists of national law which is derived from the civil law, Islamic law and customary law. Although Islamic law only applied in private law and family law, but there is religious courts to resolve any cases of marriage problems, property and sharia economic disputes by Act No. 3 of 2006

12 Under Article 1 number 21 and number 22 of Law No.. 11, 2006 on the Governing of Aceh, which reads as follows: "Qanun Aceh is regulations as similar as with provincial government regulation which regulates the government administration and the Acehnese people." See:

13 Based on regulation of the President Of The Republic Of Indonesia Number 36 , Year 2010 concerning Lists Of Business Fields That Are Closed To Investments And Business Fields That Are Conditionally Open For Investments mentioned that there are 17 sector are open to foreign investment with hundreds of business fields. Among them are agriculture, plantation, public works, trading, tourism, forestry, fishery and defense. Meanwhile only 6 sectors business closed to foreign investment… Mukti Fajar ND, Foreign Direct Invesment In Indonesia: Opportunity and challenges, Paper International Seminar “Feeling Invesment Next Doors : Opportunities And Feedbacks from Three ASEAN Members , August 29 2012 at Emperor Room 1-2, Pacific City Club, 28th Floor, Two Pacific Place 142 Sukhumvit Road, Bangkok

15 Asia’s Gambler King from Genting Highlands, Link:

16 See Article 1 number 1of Act No. 13 year 2008 about The Implementation of Hajj. It is mentioned that The Pilgrimage or Hajj is the fifth pillar of Five Pillars of Islam which is obligatory, once for a lifetime, for every Moslem who are able to do it.

17 Bank Indonesia , Islamic Banking Statistic, Oktober , 2013,p 9

18 Bank Indonesia , Islamic Banking Statistic, Oktober , 2013, p 52

19 Bank Indonesia , Islamic Banking Statistic, Oktober , 2013, p 53

20 Norhashimah Mohd.Yasin, Legal Aspects of Islamic Banking: Malaysian Experiencel, in Salman Syed Ali and Ausaf Ahmad.(ed) , Islamic Banking and Finance: Fundamentals and Contemporary Issues , Selected Papers From Conference in Brunei University Brunei Darusalam 5-7 Januari 2004, p 215

21 Angelo M. Vernardos, Islami Banking & Finance in South East Asia : Its Development & Future , Singapore, World Scientific Publishing ; 2005 , p 48… Below is the list of Islamic Banks operating in Malaysia (as of May 2012): Affin Islamic Bank Berhad, Al Rajhi Banking & Investment Corporation (Malaysia) Berhad, Alliance Islamic Bank Berhad, AmIslamic Bank Berhad, Asian Finance Bank Berhad, Bank Islam Malaysia Berhad, Bank Muamalat Malaysia Berhad, CIMB Islamic Bank Berhad, Hong Leong Islamic Bank Berhad, HSBC Amanah Malaysia Berhad, Kuwait Finance House (Malaysia) Berhad, Maybank Islamic Berhad, OCBC Al-Amin Bank Berhad, Public Islamic Bank Berhad, RHB Islamic Bank Berhad, Standard Chartered Saadiq Berhad

22 Ybhg. Dato’ Sri Zukri Samat, Islamic Banking In Malaysia : Current Trend And Way Forward, slide 23

23Hjh Salma Hj Abdul Latiff , Islamic Banking in Brunei and The Future Role of Centre for Islamic Banking, Finance and Management (CIBFM),in Salman Syed Ali and Ausaf Ahmad.(ed) , Islamic Banking and Finance: Fundamentals and Contemporary Issues , Selected Papers From Conference in Brunei University Brunei Darusalam 5-7 Januari 2004, p 278 -283

24 Ibid

25 Angelo M. Vernardos, Islami Banking & Finance in South East Asia : Its Development & Future , Singapore, World Scientific Publishing ; 2005 , p 49


27 Dahang Bunchuan , Islamic Banking And Finance: Is It Complementing Or Competing The Conventional Banks, A dissertation in part of consideration for degree of Master in Business Administration in Financial Studies at the University of Nottingham, 2006 , p 5 …. Riba is mean : An increase in amount due to interest charges especially in a loan transaction or in exchange of a commodity. The amount accrues to the owner (lender) without giving an equivalent counter value to the borrowing party. It covers interest both on commercial and consumer loans that were practiced by the conventional banks and this is prohibited by Sharia.

28Al Quran Surat . Al Baqarah:, verse 275 fully quoted : Those who swallow usury cannot rise up save as he ariseth whom the devil hath prostrated by (his) touch. That is because they say: Trade is just like usury; whereas Allah permitteth trading and forbiddeth usury. He unto whom an admonition from his Lord cometh, and (he) refraineth (in obedience thereto), he shall keep (the profits of) that which is past, and his affair (henceforth) is with Allah. As for him who returneth (to usury) - Such are rightful owners of the Fire. They will abide therein.. 

29 Muhhamd Syafii Antoni, Bank Syariah : Dari Teori Ke Praktek (From Theory to Practice), Jakarta , Gema Insani Press: 2001 p. 2

30 Angelo M. Vernardos, Islami… ibid , p 47 - 49

31Bank Indonesia , Islamic Banking Statistic, Oktober , 2013, P ix, ….. see also Dahang Bunchuan , Islamic Banking And Finance: Is It Complementing Or Competing The Conventional Banks, A dissertation in part of consideration for degree of Master in Business Administration in Financial Studies at the University of Nottingham, 2006 , p4



34 Brunei’s Guideline For Halal Certification

35 Standardization for Halal Food

36 Standardisation for Halal Food

37 Collection of Haram products cases in Indonesia ,

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