Central bank of Malaysia, Bank Negara Malaysia has issued the Shariah Parameter Reference 1 or Murabahah Parameter (SPR1) to all Islamic financial institutions under the purview of Bank Negara Malaysia. The SPR1 has been endorsed by Bank Negara Malaysia’s Shariah advisory council.
Reportedly, the Shariah Parameters initiative aims to define the essential features of Islamic financial products and services based on the underlying Shariah contracts, that are endorsed by the Shariah boards and adopted by Islamic financial institutions. The issuance of Shariah Parameters as standard documents is expected to facilitate understanding of the principles and the basis for adopting Shariah contracts.
The bank has said that SPR1 will serve as reference document, particularly for Islamic financial institutions, Shariah advisors, academia, researchers, students and members of the public who have interest in Islamic finance. It claimed that the SPR1 outlines the main Shariah requirements in the contracts and provides examples, methods and models for practical application of the contract. It has added that the Shariah parameter document provides an important reference for Shariah committee members to arrive at Shariah decisions pertaining to Islamic financial transactions, products and services.
