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Sunday, 24 February 2013

Malaysia at forefront of global Islamic finance

KUCHING: The robust growth seen in Malaysia’s Islamic banking sector has elevated it to the upper echelon of the global Islamic finance realm, according to Standard Chartered Saadiq Bhd (Saadiq) chief executive officer (CEO) Wasim Saifi.

“If you look at the progress of Islamic banking in Malaysia, Islamic banking here is much better positioned in every sense.

“Malaysia has been by far the world’s major sukuk market as consistently more than 60 per cent of sukuk issuances (and in some years even higher than that) happen in Malaysia so it has become a very important capital market from the Islamic side, probably the most important one.

“The good thing about the Islamic capital market here is that not only do you have Malaysian corporates and government linked companies (GLCs) going for sukuk issuances, you also have international companies from the Middle East and Far East coming in to tap the Malaysian ringgit market for sukuk issuance,” he said.

Wasim, who is also Standard Chartered Bank’s global head of Islamic consumer banking, pointed out Malaysia’s rare position as one of the only countries with various types of Islamic banking players operating in the country.

“You’ve got the strong domestic local Islamic banks (such as Bank Islam and Bank Muamalat) and local conventional banks with Islamic subsidiaries which are very large and robust (such as Maybank and CIMB Islamic).

“Then you’ve got the international banks (such as Saadiq) that are present in this country and the Middle Eastern Islamic banks and the regional Islamic banks operating in this country.

“So, Islamic banking here has five different levels of players. When I look around the world, there aren’t too many places which have so many different types of Islamic players operating in this industry,” he stated.

Wasim was speaking at a press conference yesterday following the official opening of Saadiq’s first branch in Sarawak, located at tHe Spring Mall.

The CEO also opined that Malaysia enjoyed a very strong Islamic liquidity pool and with government’s focus remaining so strongly on developing the Islamic banking market, that liquidity pool was increasing day by day and becoming a very attractive market for people to come in.

When asked about areas in the Islamic finance realm that could receive special attention or focus, he said there were always opportunities for growth and improvement and Saadiq recognised that from its perspective.

“Malaysia has become such an important Islamic market for us. As you know, last year we moved our global consumer Islamic team from Singapore to West Malaysia.

“The idea is to focus on seeing we can further develop the market. There is still room for further growth. I think from the product proposition side, the market needs to see further enhancement happen.

“If you look at conventional versus Islamic banking, there are still some gaps, especially when you look at areas like wealth management. So those are areas that we’ll further develop.

He noted that there was still a lot that needed to happen on the education side of customers. There were people who knew of Islamic banking but they did not know how the Islamic products were actually structured and how they worked and therefore how they were complying with requirements.

“Malaysia has done better than other countries but there is still room for growth in term of people understanding how Islamic banking truly works. The third area, which is very important, is continuing further to focus on the talent pool available because Islamic banking is growing so rapidly.

“We’re looking at 23 to 24 per cent of total banking assets in the country and the government’s aspiration to take that to 40 per cent.

“This growth requires qualified people with Islamic academic training and Islamic work experience to be able to focus on and fuel that growth.

“That is an area where we need a lot more focus from an infrastructure perspective to provide Islamic training and academic preparation so that the whole growth of the Islamic banking industry can be managed,” he added.

(Borneo Post Online / 22 Feb 2013)

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