Sustainable Financing and Enhancing the Role of Islamic Banks in Malaysia

Kunhibava, Sherin and Ling, Sarah Tan Yen and Ruslan, Md Khalil (2018) Sustainable Financing and Enhancing the Role of Islamic Banks in Malaysia. Arab Law Quarterly, 32 (2). pp. 129-157. ISSN 1573-0255

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Official URL: https://doi.org/10.1163/15730255-12322023

Abstract

Although the banking sector does not directly affect the environment, it can pursue environmentally friendly practices and reduce waste. Moreover, it can promote environmentally sustainable investments and encourage businesses to adopt similar practices. Because Islam encourages preservation and prohibits harm to the earth, Islamic banks are expected to follow such practices in pursuit of Sharīah compliance. In Malaysia, Islamic banks have already embarked on this path, mainly by practising conservation in operational matters; however, other areas of sustainable financing have been less enthusiastically pursued. This study recommends a three-level approach: (1) at the banking level, more proactive steps should be taken, e.g. greening operations, introducing environmentally friendly products and services, complying with environmental regulations, creating awareness and training stakeholders; (2) at the national level, the Central Bank should introduce appropriate policies and guidelines; and (3) at an international level, voluntary principles should be adopted to ensure compliance with global initiatives.

Item Type: Article
Uncontrolled Keywords: environment; green banking; Islamic banking in Malaysia; sustainability
Subjects: B Philosophy. Psychology. Religion > BP Islam. Bahaism. Theosophy, etc
H Social Sciences > HG Finance
H Social Sciences > HG Finance > Banking
Divisions: Faculty of Law
Depositing User: Ms. Juhaida Abd Rahim
Date Deposited: 04 Jul 2019 08:23
Last Modified: 04 Jul 2019 08:23
URI: http://eprints.um.edu.my/id/eprint/21572

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