Abdul Malik Ishak J:

The Al-istisnaa' Facility Agreements - The Islamic Banking

[1] The Islamic Banking Act 1983 is an interesting piece of legislation. By way of s. 2 thereof, the following germane definitions appear:

'Islamic bank' means any company which carries on Islamic banking business and holds a valid licence and all the offices and branches in Malaysia of such a bank shall be deemed to be one bank; and

'Islamic banking business' means banking business whose aims and operations do not involve any element which is not approved by the Religion of Islam.

[2] By way of a comparison, reference should be made to the Banking and Financial Institutions Act 1989 ("BAFIA") where by way of s. 2(1) thereof, "banking business" has been defined to mean:

(a) the business of:

(i) receiving deposits on current account, deposit account, savings account or other similar account;

(ii) paying or collecting cheques drawn by or paid in by customers; and

(iii) provision of finance; or

(b) such other business as the Bank (referring to Bank Negara Malaysia), with the approval of the Minister, may prescribe; ...

[3] By now, Malaysians are familiar with the concept of interest free banking that is off