ISLAMIC FINANCE EVOLUTIONS OF ISLAMIC FINANCE IN MALAYSIAINTRODUCTIONIslamic finance is the provision of financial services on a basis compliant with the principles and rules of Islamic commercial jurisprudence and a branch of Shari Islamic «ah jurisprudence. This means that all operations of the bank must be based on Shari'ah jurisprudence, including remittance, letter of guarantee, letter of credit and foreign exchange operations. The main factor that distinguishes between Islamic banking and conventional banking is that all its activities are conducted without any element of interest. Interest also known as riba in Islam. This is because Islam prevents Muslims from giving and taking riba in all matters. Apart from this, the main objective of establishing Islamic banks is to meet the needs of Muslims in the banking sector. Basic business operations are also based on the resolution of Al-Quran and Hadith, which is based on the concept of right and in the interest of society. Islamic finance concepts also mean prohibition of fixed return, profit and loss sharing and therefore risk sharing, prohibition of gharar (uncertainty), speculation and gambling. HISTORY OF ISLAMIC FINANCE IN MALAYSIA In 1980 The Kongres Ekonomi Bumiputera in 1980, the Lembaga Urusan a dan Tabung Haji will be permitted to establish Islamic banks which aim to raise and invest money belonging to Muslims. In 1981 the government urged immediate action to establish laws for the establishment of banks and financial institutions operating on the basis of the principles of Islam. July 30, 1981 The government established the Jawatankuasa Pemandu Kebangsaan Bank ...... middle of paper ...... Institutions operating in a financial system also have advantages in terms of competitiveness. Therefore, banking institutions in Malaysia will increase competitiveness, service quality and the quality of their products to attract customers. CONSTITUTION OF LEMBAGA TABUNG HAJIL Lembaga Tabung Haji Council established in 1969 to save money of the Muslim community wishing to perform hajj. Hajj business fund administered according to shariah laws. Lembaga Tabung Haji are on the rise, particularly in diversified investments that will generate income and profits. ZAKATZakat is the quantity of certain properties requested from the gods by people entitled to receive as well as produce a certain quantity itself. Zakat laws of each state in Malaysia issued by the Majlis Perundangan Negeri respectively. Zakat can prevent a Muslim from jealousy and greed towards others.