Malaysia on track to become world's Islamic finance hub

Malaysia is on the way to become the world's Islamic finance centre, second finance minister Nor Mohamed Yakcop said.

Malaysia on track to become world's Islamic finance hub
"We have what it takes. We have grown so much in the 24 years since 1983 when there was only one Islamic bank,'' he told reporters in Kuala Lumpur after launching the prospectus for Al-Hadarah real estate investment trust (REIT).

"Over the past two decades, the Islamic capital market in Malaysia has emerged as a significant area of growth to become an anchor component of our capital market development,"

"The increasing acceptance of our Islamic capital market products by international investors offers unprecedented opportunities for Malaysian issuers and intermediaries," he added.

Mr. Yakcop also said that "the way forward is to further expand product diversity to meet the growing requirements of more sophisticated investors."

Mainly Muslim Malaysia devised a long-term scheme to develop new investment plans to attract global Islamic funds in a bid to boost the country's role as an Islamic hub in the international financial community.

Islamic banking is flourishing worldwide, even in Western states, as banks try to tap into the booming Islamic finance market, tailoring products for consumers who follow the Islamic Shariah, which forbids the giving or receiving of interests.

The Shariah law also prevents Riba, or usury, as well as investing money in the alcohol industry or tobacco sales.

According to Britain's Financial Services Authority, assets held in Shariah-compliant accounts worldwide total $200 billion to $500 billion and growing at 10 percent to 15 percent a year.

Many international banks are now trying to build on the success achieved by the Islamic banking in mostly Muslim countries like Malaysia and Turkey, as well as European countries that have large Muslim Communities.

It's worth mentioning that Islamic banking system is relatively low in the United States. However, regulators say they are trying to accommodate increasing activity.

Güncelleme Tarihi: 20 Eylül 2018, 18:16