Islamic Banking Act

This entry examines the main aspects and content of the Islamic Banking Act of 1983, adopted and put into effect in Malaysia to supervise and regulate the activities and transactions of the Islamic finance institutions, particularly the participation banks. The Act provides a legal framework and basis for the corporate and institutional banking activities, and further imposes sanctions in cases of breaches. The Act may also be considered as a major step forward in the legalization of the Islamic finance and banking, as it is one of the earliest examples of attempts to create a legal foundation for the business of Islamic finance.