Enhancing the Effectiveness of Legal Infrastructure: A Study on Legal Issues and Other Challenges of Islamic Banking and Finance in Malaysia

One of the strategies in the Financial Sector Master plan of Malaysia is to set the country as a global Islamic financial hub by 2010. Malaysian banking industry is expected to constitute 20 percent of overall global banking and insurance market in terms of assets, financing and deposits To achieve the Islamic financial hub status internationally, issues and challenges faced by the Islamic financial institutions should be highlighted and gives serious attention. In becoming global financial hub, domestic financial institutions need to enhance their capacity and capability so that they will be able to compete with global players in the industry in terms of product offerings and innovations, corporate governance and human capital. Does the legal infrastructure i.e. statutes is effective in supporting Islamic banking and finance in Malaysia?. Thus, the objective of this paper is to discuss legal infrastructure issue on Islamic banking in Malaysia such as legislation, civil court jurisdict