The policy brief revisits Malaysia’s longstanding position on bayʿ al-dayn and examines whether the policy remains appropriate in light of developments in Islamic finance, market dynamics, and the availability of alternative Shariah-compliant structures.
Key highlights include:
Examines the SAC’s 1996 decision permitting bayʿ al-dayn against the backdrop of a more mature global Islamic finance ecosystem.
Highlights the significant gap in foreign participation between MGII and conventional MGS.
Assesses the public-interest rationale for bayʿ al-dayn against empirical evidence.
Finds that more than half of surveyed Malaysian Islamic banks have moved away from bayʿ al-dayn in trade finance, while liquidity management presents a more fundamental structural challenge.
Proposes a three-phase, 5-year approach covering foundational regulatory review, structured transition, and capital-market alignment and international positioning.
We invite policymakers, industry stakeholders, researchers, and members of the public to explore the brief and its key insights.
