Latest from GIFC

Tuesday, 3 November 2009

Significant Success For Malaysia In Islamic Finance, Says Prime Minister


KUALA LUMPUR, Nov 3 (Bernama) -- Prime Minister Datuk Seri Najib Tun Razak said Malaysia has achieved significant success in Islamic finance which at end June this year accounted for close to 19 per cent of the country's banking assets.

As at end-August, the Islamic capital market too had reached RM803 billion, representing 54 per cent of Bursa Malaysia's market capitalisation.

"Total financing now amounts to RM115 billion and constitutes 15.5 per cent of the total financing portfolio of the banking industry. Net non-performing financing remains low at 2.4 per cent," he said.

In his keynote address at the Sixth Annual Kuala Lumpur Islamic Finance Forum (KLIFF) here Tuesday, the Prime Minister said the country is also seeking to enhance its connectivity in Islamic Finance with other financial centres through Malaysia International Islamic Financial Centre (MIFC).

"For this purpose, Malaysia has entered into agreement via a memorandum of understanding with various jurisdictions for greater collaboration and engagement of mutual benefits in Islamic finance," he said.

He said Malaysia will continue to lead the way in expanding the outreach of Islamic finance, and therefore more MoUs signing with jurisdictions in other parts of the world are expected in the future.

In his address, Najib said Islamic finance was a strategic vital element in the world's recovery from a financial crisis that has shaken both finances and faith in banking institutions.

"Although Islamic finance has largely escaped the ravages caused by overzealous financial innovation and imprudent lending practices which were at the heart of the global financial crisis, we cannot afford to be complacent," he said.

He said it was imperative for the industry to draw upon the lessons learnt to ensure that it can avoid any such financial instability in the future.

Najib also highlighted several key drivers to ensure continuing resilience of Islamic finance in withstanding the impact of current and future crisis.

"Firstly, ensuring that innovation in Islamic finance remains grounded in Maqasid al Shariah (objectives of Syariah) which serves to anchor the business paradigm of Islamic finance in realisation of benefits to the people."

Then, innovation must also be supported by strong governance practices which hold true to the needs of Islamic financial institutions.

It must also be ensured that risk management systems have appropriate safeguards and keep pace with the sophistication of innovation in Islamic finance, the prime minister said.

There is a need to ensure a comprehensive and supportive infrastructure - a legal, regulatory and supervisory framework that addresses the unique elements of Islamic finance industry development.

"This needs to be additionally supported by institutional arrangements for expedient, effective and cost efficient resolution of troubled financial institutions and a financial safety net framework that encompasses the lender of last resort and a deposit insurance system," he added.

Links:
Islamic finance consulting and training
Islamic finance consultant and trainer
Join Global Islamic Finance Group (GIFG) on facebook

No comments:

Upcoming Events on Islamic Finance, Wealth Management, Business, Management, Motivational Alfalah Consulting, KL-Malaysia: www.alfalahconsulting.com

ISLAMIC FINANCE EVENTS KUALA LUMPUR MALAYSIA

ISLAMIC FINANCE EVENTS KUALA LUMPUR MALAYSIA
Register Online . Register Today

Islamic Financial Planning & Wealth Management by Ahmad Sanusi Husain