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Malaysia establishes International Syariah Research Academy (ISRA)

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Points of Essence:

  • To coincide with the proposed issuance of the Shariah parameters in the first quarter of 2009, the Malaysian central bank has launched the establishment of the International Syariah Research Academy (ISRA) in Malaysia. ISRA is poised to become an international Shariah and business research powerhouse to spearhead the development of the cutting edge Islamic financial products. It is also expected to forge a higher level of engagement between the Shariah experts and the stakeholders on the issues affecting the industry. The Edge Daily has the report which also highlighted the resilience of Malaysia’s financial  system post global credit crisis.

12-11-2008: Zeti: Overall financial system sound
by Surin Murugiah
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KUALA LUMPUR: Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz has affirmed that while the financial market in Malaysia has been affected by the global financial crisis, the overall financial system remains sound and liquidity is ample.

She said the banking institutions were operating with strong capital and liquidity buffers, and have continued to provide financing to the economy, noting that while the domestic stock market had been affected by the global financial meltdown, it had stabilised and improved.

“We have not been insulated from this global development. The spillover effect has been felt across the board by most developed nations,” she said.

Speaking to reporters after the launch of the International Syariah Research Academy (ISRA) here yesterday, Zeti said the central bank had the flexibility to adopt the necessary policies and measures in the current challenging environment. She said this when asked if the central bank would be reviewing the overnight policy rate (OPR).

ISRA ED Dr Mohamad Akram Laldin (left) exchanging documents with Aibim president Datuk Zukri Samat, witnessed by Minister in the Prime Minister’s Department Datuk Seri Ahmad Zahid Hamidi (2nd from left) and Zeti at the launch of ISRA yesterday.

“At every meeting, we review the OPR. Inflation has already peaked. By the middle of next year, it will be below 4% and later lower than that,” she said.

When asked if the central bank would introduce stimulus packages similar to those announced by other central banks, she said: “At this stage, the policies are aimed at sustaining consumption demand and providing a positive environment for investment activities to take place.”

“As you know, for a few years now, our economy has been domestic driven, so while external sectors will be affected by this global economic slowdown, we need to ensure that growth does occur in the domestic economy, and we have every opportunity to see that happen. While growth will slow down, we will still see growth,” she said.

Zeti said that while half the global economy was likely to go into recession next year, the other half would experience growth, albeit at a slower pace.

“The key to this is sustained consumption demand and some investment activity,” she said.

“The banking sector is important. So far, we see that the sector, which has been resilient and still has strong buffers, will show growth in lending, which is vital for the growth process,” she said.

Earlier in her speech, Zeti said Bank Negara had embarked on an initiative to promote more consistent application of the Islamic financial contract and greater standardisation of Islamic financial practices known as the “syariah parameters” project. She said the initiative aimed to determine the essential features of Islamic financial products derived from underlying syariah contract such as murabahah, istisna’, mudarabah, musharakah, ijarah and wadi’ah.

“These features will serve as a guide for the application of the syariah contract for the Islamic financial products, which can be applied when designing new products or in the enhancement of the existing products.”

“The syariah parameters, once promulgated, would be a standardised point of reference for the practices being adopted among Islamic financial institutions, Islamic finance professionals and practitioners when entering into Islamic financial contracts,” she said.

The syariah parameters are expected to be issued in 1Q09.

Zeti said the establishment of ISRA as a specialised research entity served as a critical infrastructure for driving innovation in Islamic finance.

ISRA would be instrumental in spearheading the development of competitive Islamic financial instruments by combining syariah and business strategies in product structuring and development.

“The mandate of ISRA is to conduct applied research in the area of syariah and Islamic finance which are relevant to market requirements and to contribute to a higher level of engagement amongst practitioners, scholars, regulators and academicians on syariah issues surrounding Islamic financial practices,” she said.


Written by Suapi Shaffaii

November 12, 2008 at 11:30 pm

One Response

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  1. Nice Post, I have bookmarked your site and will return again.
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    November 22, 2009 at 11:21 pm

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