(Shariah Harmonisation and Regulatory Consolidation: BNM Experience)  

Islamic banking and finance has different business activities if compared to conventional banking and finance.  The business activities of Islamic banks and financial institutions are premised primarily on trading, leasing, participatory contracts and fee-based arrangements.  This is in contrast with the conventional banking business that is based mainly on lending and borrowing contracts.  As a result, the legal relationship and consequences of the Islamic banking and financial contracts are different from those of the conventional banking and finance.  In other words, Islamic banking and finance activities give rise to different contractual features from the Shari`ah as well as legal perspectives.  Thus, it is important that the legal and regulatory framework of the country that has Islamic banking and finance operations recognizes and addresses the differences properly so as to prevent inappropriate regulation and regulatory arbitrage.