Islamic finance has evolved rapidly, and the major transformation it has undergone in the last five years has given rise to new opportunities, said Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz.
She said Islamic finance had witnessed “exceptional growth” not only in the Muslim world, but also across the Western world.
“Today, the total assets of the Islamic financial system have surpassed one trillion US dollars, about five-fold its magnitude five years ago,” she said in her keynote address at the Nikkei Islamic Finance Symposium 2008 in Tokyo over the weekend.
Zeti said Islamic finance was among the fastest growing financial segments in the world, with an estimated annual growth of 20%.
“To date, the number of Islamic financial institutions worldwide has increased to more than 300, spanning more than 75 countries both in the Muslim and non-Muslim countries.”
Tan Sri Dr Zeti Akhtar Aziz
On the local front, Zeti said initiatives were being implemented to capitalise on the global growth of Islamic financing.
“We are now entering a new phase in the development of an Islamic financial system in Malaysia, with initiatives to position Malaysia as international Islamic financial hub,” she said.
The initiatives, she said, would be aimed at strengthening international economic ties and promoting greater regional and international trade and investment activities.
“New licences have been issued and greater foreign interest within the domestic Islamic financial institutions have also been permitted,” Zeti said, adding that listing rules had also been liberalised to promote cross-border listings.
“New licenses are also being issued for international Islamic banks and international Takaful operators to conduct Islamic banking and Takaful and retakaful business in international currencies.”
According to Zeti, the most significant progress achieved was in the development of the Malaysian sukuk market, which charted an average annual growth of 17% between 2001 and 2006.
“The Malaysian sukuk market is now the largest Islamic bond market in the world with more than 62% (or US$60bil) of the global outstanding sukuks having originated from Malaysia.”
All in all, Zeti said, everybody stood to benefit from Islamic finance.
“Islamic finance has become a new area of growth that is very vibrant in generating income, wealth and employment,” she added.
Zeti was one of the three keynote speakers at the one-day conference organised by Nihon Keisai Shimbun.
source : biz.thestar