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Getting to Know Islamic Banking


Islamic banking has a long-established presence, with a wide array of services in Malaysia. However, it is the unique principles and ethical foundation that truly set Islamic banking industry apart.  


Read on to discovering what makes Islamic banking special and how it can benefit you.


Banking, the Islamic Way


From financing and investments to takaful products, the Islamic banking segment offers an array of financial services.


So what is Islamic banking?


Islamic banking (also known as Shariah-compliant banking) encompasses a large segment and is offered by various financial institutions across the globe. In fact, there are over 1,500 Islamic financial institutions worldwide across 80 countries*Many banks in Malaysia, such as CIMB Islamic, also offer a variety of Shariah-compliant services to consumers. 


What distinguishes Islamic banking from conventional banking is its underlying principles. Islamic banking complies with the Shariah law and encompasses characteristics such as:


  • Prohibition of riba or interest

    A fundamental principle in Islamic banking is the prohibition of riba or interest. 


  • Asset-backed financing

    Islamic financing is often asset-backed, which means that the financing is given via real sale transaction, and not via loan with interest. 


  • Selective Investment

    Islamic banking is guided by the Shariah principles, which disallow investment in businesses that are considered unethical such as the alcohol and gambling industries. 

  • Prohibition of excessive uncertainty (Gharar Fahish)

    Gharar refers to uncertainty, hazard, risk and a lack of knowledge. In Islamic banking, financing contract with unclear terms which leads to excessive uncertainty are prohibited in order to promote more transparency and fairness. 


  • Ethical and social objectives

    Maqasid Shariah, or the higher goal of Islamic banking, is to promote social justice, economic stability and sustainability within the financial ecosystem. Islamic products and financing are often developed to align with these objectives.

Islamic Banking is Open to All


If you’re wondering if Islamic banking is for you, then wonder no more. Here, we share a few reasons why you should explore Islamic banking for your banking needs:



Islamic banking is for everyone


Anyone can enjoy Islamic banking products and services no matter their religion. It is not exclusive to Muslims only.


Global Presence


Just how well-known is the Islamic banking segment worldwide? The global Shariah-compliant finance market was valued at $2.2 Billion in 2021 and it is expected to have a valuation of approximately $3.02 billion by 2027 and a CAGR (compound growth annual rate) of 10.2% between 2022-2027**.

Islamic banking has grown rapidly since its inception and remains competitive in the banking sector. 


Ethical and Responsible


Due to the prohibition of riba and gharar, Islamic banking products are designed to be ethical and responsible.


Islamic banking also emphasises transparency in its financial transactions, where terms are often straightforward and easy to understand to reduce the risk of hidden fees or complex financial arrangements.


Be it a place to save or invest your money, or financing for your home, business or car, Islamic banking can help you achieve your financial aspirations and needs. To start, you can always reach out to experts at CIMB for guidance on building a portfolio to achieve your financial goals. 


Plenty of services that fit your financial needs 


A common myth is that Islamic banks offer a limited range of financial products and even fewer options for investments.


Well, we’re here to dispel the myth. Islamic banks offer a wide range of banking products much like their conventional counterparts – from savings accounts, current accounts, credit cards, auto and home financing, business financing to various investments.


At CIMB Islamic, you can find an array of Shariah-compliant banking services and products to help you grow and preserve your wealth.


Find out more about our products:



Or, you can also reach out to us to know more about CIMB Islamic's offerings. 


Visit the Life Goals section for more financial guides and tips. 



This article is for informational purposes only and CIMB does not make any representation and warranty as to the accuracy, completeness and fairness of any information contained in this article. As this article is general in nature, it is not intended to address the circumstances of any particular individual or entity. You are advised to consult a financial advisor or investment professional before making any decisions based on the information contained in this article. CIMB assumes no liability for any consequences arising from your reliance on the information presented here.





**Market Data Forecast, “Market Data Forecast,” Market Data Forecast, 31 May 2022. [Online]. Available: