Abstract
The purpose of this paper is to discuss the financial consumer protection in Islamic banks in the context of Islamic Financial Service Act 2013 (IFSA 2013) by looking simultaneously to the standards and guidelines issued by Bank Negara Malaysia (BNM). This conceptual paper examines relevant provisions in both Acts as well as in respective standards and guidelines by BNM related to financial consumer protection. In keeping with the main focuses of BNM on promoting fair, responsible and professional conduct by financial services providers to secure financial stability, this paper highlights the provisions which need to be adhered by the Islamic banks in treating their financial consumers. The discussions of the relevant provisions, standards, and guidelines will enrich the academic understanding of financial consumer protection in Malaysia. This study provides an insight on the initiatives taken in Malaysia particularly in the Islamic banking industry to protect the financial consumers.
Highlights
IntroductionRegulations, supervisory and oversight structures are fundamentals to the modern financial system (The World Bank, 2014)
Financial consumer protection laws, regulations, supervisory and oversight structures are fundamentals to the modern financial system (The World Bank, 2014)
The International Monetary Fund (IMF) Working Paper 2015 mentioned that inadequate attention to consumer protection and financial literacy can lead to financial instability
Summary
Regulations, supervisory and oversight structures are fundamentals to the modern financial system (The World Bank, 2014). The International Monetary Fund (IMF) Working Paper 2015 mentioned that inadequate attention to consumer protection and financial literacy can lead to financial instability. Financial consumer protection consists of three main pillars i.e.; financial education, financial literacy and legal framework. The G20 Finance Ministers and Central Bank Governors endorsed the High-level Principles on Financial Consumer Protection. The Committee members of the BCBS which consists of senior representatives of bank supervisory authorities and central banks believe that with the coming into force of the Core Principles, a significant step toward improving financial stability would be created and provide a good basis for further expansion of effective supervisory system (Basel Committee, 2012). Measures and main instruments of consumer protection in conventional finance, are relevant in Islamic finance with certain adjustments the Shariah compliant element (Nienhaus, 2015)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
