Local Islamic banks need to innovate more to remain competitive within the industry following the government’s move to liberalise the financial services sector.
“I think it is a question of survival for competitors. Local players need to buck up and innovative more to effectively compete.
He told Bernama this after the signing ceremony of Bank Islam’s closed RM330 million syndicated facility for Kedah Sato Sdn Bhd’s new Kolej Universiti Insaniah (KUIN) campus in Baling.
He said in promoting Malaysia to become a leading international and regional hub of Islamic finance, the country needs more industry players.
“My view is that, the interest of the foreign parties, will basically strengthen our position as an Islamic financial hub. When they come in, they will bring along more products and even capital.
“Personally, I welcome them,” he added.
Recently, it was reported that the National Bank of Abu Dhabi – one of biggest in the United Arab Emirates – plans to start commercial banking operations in Malaysia under the liberalisation plan.
Meanwhile, Bahrain-based Islamic lender, Al Baraka is in talks to buy a stake in Malaysia’s Bank Muamalat.
“I think the cake is still big enough for everyone to share. But I will not say, local players would not be affected by the liberalisation move. Some will be.
“However, there are niche areas, where local players need to position themselves and perform,” he explained.
He said the Islamic finance industry in Malaysia is growing faster than conventional banking, with a 20 per cent growth annually.
Asked if there would be any joint-ventures with foreign parties, he said: “If they are already here, I don’t think we need to have any form of cooperation.
“Of course, they have to be members of the Association of Islamic Banking.
“On that platform, we will cooperate with one other. But I don’t think, there is a specific strategy to collaborate with these banks,” he explained.
Zukri also said, he is confident the Islamic finance industry will show a positive trend this year.