The Development of Ethical Banking Concept Amongst the Malaysian Islamic Banks

Abstract

Ethical banking is a concept that is gradually receiving attention and acceptance from the depositors and investors who are not only searching for a place to save and invest their money safely, but also a place where their money will be channelled to productive activities which are free from elements that contribute to the deterioration towards standard of living and environmental aspects. The emergence of Islamic banking with its sounds principles and philosophies that adhere to Shariah has given opportunity for the people to utilize the services with peace of minds concerning their savings and investment. In contrast, there is a gap between current practices of Malaysian Islamic banks and the practice of Cooperative Bank of Britain pertaining to ethical banking products which indicates that the latter possess a better range of products and services in the context of ethical banking. This conceptual study reveals that one needs to distinguish between ethical banking product and Corporate Social Responsibilities (CSR) and there is much to be learnt for the local Islamic banks from the Cooperative Bank of Britain if one aspires to be a complete bank with ethical banking products.