<![CDATA[Islamic banking in Malaysia has experienced significant growth over the past four decades, positioning the country as a global leader in Islamic finance. This development is supported by the implementation of Shariah-compliant contracts as fundamental legal and ethical instruments governing financial transactions. This study aims to examine the regulatory framework of Shariah contracts in Malaysian Islamic banking, including the roles of Bank Negara Malaysia (BNM) and the Shariah Advisory Council (SAC) in ensuring compliance and standardization. The study also analyzes the application of key contracts, such as Murabahah, Ijarah, Mudarabah, Musharakah, and Wa’d, in various Islamic banking products and services. Using a qualitative research approach, data were collected through a systematic review of literature, regulatory frameworks, and official documents issued by Malaysian financial authorities. The findings reveal that Malaysia has established a strong Shariah governance framework; however, several challenges remain, including differences in Shariah interpretation, limited application of equity-based contracts, fintech regulatory issues, and tensions between commercial objectives and Maqasid al-Shariah principles. This study concludes that strengthening Shariah governance, enhancing cooperation between scholars and practitioners, and developing adaptive regulations are essential to ensuring the sustainability and competitiveness of Islamic banking in Malaysia.]]>
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