Islamic banking within the financial development of Malaysia (M.A. Dissertation)

The creation of an Islamic bank in Malaysia illustrates another example of supply-following economic policies that the Central Bank (Bank Negara) has implemented to promote financial development. The supply-leading policy follows from the concept that active government development of the financial system will stimulate economic growth. The savings generated from deposits to Bank Islam by newly incorporated Muslim depositors will be used for further investments within the economy. Bank Islam has had a qualitative rather than quantitative impact on financial development, and has been consistent with the government's policy of building an economy and financial system that meets the indigenous needs of the Malaysian people, in this case the Muslim population.