Norhashimah Mohd.Yasin− 220 −
between Islamic law and other statutes, the former will not necessarily
prevail.
This oversight should be rectified. Perhaps a lesson could be taken from
Pakistan where the Islamic banking law has been constructed as follows:
“The provisions of this ordinance shall have effect notwith-
standing anything contained in the Companies Act 1913 (VII of
1913), or any other law for the time being in force.”^12
The above provision overrides all other laws so that if there is a conflict
between the Islamic banking law and any other law currently in force in
Pakistan, the provision of the former shall prevail.
One interesting statutory requirement for an Islamic bank in Malaysia
which is not present in BAFIA is the establishment of an in-house Shari[ah
Advisory Body (SAB) to advise the bank management as to Shari[ah
compliance. Section 3(5)(b) provides:
“That there is, in the articles of association of the bank concerned,
provision for the establishment of a Syariah advisory body to
advise the bank on the operations of its banking business in order
to ensure that they do not involve any element which is not
approved by the Religion of Islam.”
The details of the SAB is not elaborated in the Act. It is to be detailed by
the bank’s Articles of Association. The IBA only provides that the statutory
duty of the SAB is to “advise the bank on its banking business in order to
ensure that they do not involve any element which is not approved by the
Religion of Islam”. The Islamic Banking (Amendment) Act 2003 has been
recently passed.^13 It incorporates a new section 13A on the “Advice of
Shari[ah Advisory Council” which provides:
“An Islamic bank may seek the advice of the Syariah Advisory
Council on Syariah matters relating to its banking business and the
Islamic bank shall comply with the advice of the Syariah Advisory
Council.
In this section, “Syariah Advisory Council” means the Syariah
Advisory Council established under subsection 16B (1) of the
Central Bank of Malaysia Act 1958.”
However, there still exist some legal uncertainties as to the legal position
of the SAB which needs to be resolved urgently, such as: