BA249 - BACHELOR OF BUSINESS ADMINISTRATION (HONS.

) ISLAMIC
BANKING

ISB566- ISLAMIC ECONOMIC

INDIVIDUAL ASSIGNMENT - MAIN ISSUES ISLAMIC ECONOMY OF ONE

COUNTRY CHOSEN.

GROUP:

JBA2492C

PREPARED BY:

NAME OF GROUP MEMBERS ID STUDENT

MUHAMMAD ‘AMMAR AFIQ BIN RAHMAN 2022764423

PREPARED FOR:

SIR MOHD KHAIRUL ARIFF NOH

‌SUBMISSION DATE:

9th AUGUST 2022

 ISLAMIC ECONOMIC IN THE THAILAND

Muhammad ‘Ammar Afiq

Faculty Of Business And Management, Bachelor Of Business Administration (HONS) Islamic

Banking, Universiti Teknologi Mara Cawangan Johor, Kampus Segamat

Abstract - This study is focused on the contemporary economic history of the first and only
Islamic bank in the Thailand, the Islamic Bank of Thailand (IBank). Despite the passage of
a legislation pertaining to Islamic finance in 2002, Thailand's industry has made little
progress in terms of development over the years as a result of the Thai government's lack
of support for a thorough legislative and regulatory system for the business. The Islamic
Bank of Thailand, the only Islamic bank in the nation, is now recovering from a very
turbulent 2013. The 'Islamic window' concept was originally established by Government
Savings Bank in 1998, which marked the beginning of Thailand's Islamic banking system.
By establishing Islamic Bank of Thailand in 2003, the government gave the Islamic
banking system additional legitimacy.

1.0 INTRODUCTION

Contrary to 'Western' type economies where it is somewhat easier, it is challenging to grasp and
study Islamic economics and the structure of the Islamic financial system in isolation. Islamic
Economics defines economic problems fundamentally differently than laws and institutions that
were created by humans. Even though Islam is one of the major world religions, it is also a fully
integrated way of life, where different principles are intertwined and a commandment under one
aspect, like family, can logically be relevant to another, like jurisprudence. To begin with, it can
be said that the socio-economic paradigm serves as the foundation for Islamic economics. Islam
is viewed as an ethical system in this perspective. The core topic, which might be seen as a
beginning point for understanding Islam and Islamic economics – 5:120 The Qur'an, where it
states that dominion of the cosmos belongs to God (Allah) and therefore we are but His vice-
regents (or trustees) of all this dominion, whether we seemingly own some part of this
individually, jointly or otherwise. Therefore, this fundamental idea must serve as the foundation
for all economic and financial activities that have the potential to influence and govern our lives.
(2022)
 2.0 ISSUE

2.1 High Growth and Diversification of Data

Prior to this, IBank data had an annual growth rate of about 30%. However, the statistics showed
a large growth rate increase from 2010 to 2011—up to 100%—due to the company's expansion
in terms of branches, customer bases, and personnel numbers. The bank currently has 2,800
people working in 107 offices across the country and over 750,000 accounts.

"It is challenging to trace data and recover lost data due to the considerable data growth rate and
storage in many departments. So, in order to facilitate easier data tracing, backup, and faster
retrieval, we need to build up a storage roadmap as the central system to collect all data from
every department, according to Dr. Varanyu Suchivoraphanpong, executive vice president of
IBank. (Vantara, n.d.)

2.2 Rating Sensitivities

If the sovereign's tendency to support the bank decreases and IBANK's credit profile deteriorates in
comparison to other financial institutions rated on the Thai national scale, the agency may reduce
IBANK's ratings. This might be obvious, for instance, if the state's ownership of the bank significantly
decreases, it loses control, reduces its role in setting policy, or changes its legal status as a state policy
bank. (Fitch Affirms Islamic Bank of Thailand at 'AA(tha)'/Stable, n.d.)

2.3 Economic Potential

Majorities of Thailand's Muslim community reside in rural areas and work primarily in agriculture. These
Thai Muslims are among the most underprivileged people in Thailand's southern districts. The areas with
the highest rates of poverty are Narathiwat, Pattani, and Yala. Additionally, when compared to all of
Thailand, the Southern Region's provinces have low GDP and income per capita. As a result, Islamic
banks will find it difficult to draw in local deposits, which presents a hurdle. Banks may therefore need to
entice deposits from other areas to fund commercial activities in these provinces. (Yamirudeng)
 3.0 SOLUSION

3.1 Hitachi Unified Storage 130 and Hitachi IT Operations Analyzer

Two Hitachi Unified Storage (HUS) 130 systems were installed by the bank. It set up 1 in its
data centre and 1 in its disaster recovery facility to oversee daily storage and backup. Data can be
saved as objects or block files, and backups can be finished every five minutes. This flexibility
and scalability will support the data's expected future growth rate. The interoperability of HUS
130 systems with storage technology in the virtualized environment of the bank was another
important deciding element in IBank's decision. For instance, VMware software, which is
deployed to improve the management of virtualized applications, can be supported by HUS 130.

Therefore, all sources may benefit from the expansion of IT infrastructure. In the future, the bank
can effectively manage and modify the storage capacity to accommodate application needs, data
size, and organisational working conditions.

3.2 Positive Rating Action/Upgrade

If determines that there is a higher likelihood of support from the government, while also taking
into account IBANK's relative strengths on the Thai national scale, the ratings may improve.
This could happen if the government shows signs of having a long-term commitment to owning
shares in the bank and IBANK's policy function is strengthened, including the size of its role.

3.3 Organization The Economic

Start your economics education with a study of business, its technical operations, mining,
forestry, agriculture, the manufacturing arts, and commerce. Charts, illustrations, models, and
visits to manufacturing and other establishments should all be a component of the instruction that
is given most frequently.
 4.0 CONCLUSION

The establishment of a "Islamic window" idea by the Government Savings Bank in 1998,
followed by the Bank for Agriculture and Agricultural Cooperatives in 1999, marked a
significant turning point in Thailand's development of an Islamic banking system. The different
difficulties that Thailand's Islamic banking system has to deal with are covered in this study. The
issues raised in this report include those related to the economy potential, rating sensitivities, and
high growth and diversification of data. Prospects for this new system to replace the current
conventional banking system still exist despite these difficulties. Islamic banks in Thailand have
a good chance of becoming important financial organisations in the future because Muslims
predominate in the Southern Region. These banks' management must be customer-focused,
imaginative, creative, and receptive to any potential changes in the market if they are to succeed.

5.0 The Exclusion Of The Topic Related In The Subject

I can connect these worries to the final chapter of ISB566 in this case study: function of the state.
The human urge to live in peace and grow intellectually and quantitatively has resulted in state.
The state is described by Max Weber as "a compulsory political system with a centralised
authority that maintains a monopoly on the authorised use of force within a specified zone." In
this state, the government is in charge of ensuring that every individual has the bare necessities
of life. The term "support state" can also refer to the creation of a "social safety net" with
minimum standards for various forms of welfare.
References
Fitch Affirms Islamic Bank of Thailand at 'AA(tha)'/Stable. (n.d.). Retrieved from Fitch Rating:
https://www.fitchratings.com/research/islamic-finance/fitch-affirms-islamic-bank-of-thailand-
at-aa-tha-stable-27-10-2020

Islamic Bank of Thailand. (2022, August 2). Retrieved from Wikipedia:

https://en.wikipedia.org/wiki/Islamic_Bank_of_Thailand

Vantara, H. (n.d.). Islamic Bank Of Thailand (IBank). Retrieved from Hitachi Vantara:
https://www.hitachivantara.com/en-asean/company/customer-stories/islamic-bank-of-
thailand-case-study.html

Yamirudeng, S. H. (n.d.). ISLAMIC BANKING IN THAILAND: PROSPECTS AND CHALLENGES. International

Journal of Islamic Financial Services Vol. 5 No.2, 8.