Najib: Address challenges in Islamic finance
Published: Nov 29, 2005 8:45 AM | Updated: Jan 29, 2008 10:21 AM
Malaysia will have to face challenges in the Islamic finance and banking industry head-on in order to maintain its competitiveness as the world's number one Islamic financial centre, Deputy Prime Minister Najib Abdul Razak said today.
Malaysia will have to face challenges in the Islamic finance and banking industry head-on in order to maintain its competitiveness as the world's number one Islamic financial centre, Deputy Prime Minister Najib Abdul Razak said today.
"What I mean is that Malaysia may have had a head start but this will not be with us forever," he said in his keynote address when opening the Islamic Finance Forum 2005 in Kuala Lumpur.
According to Bernama, Najib said Malaysia was facing enormous competition from other countries as well as international banking conglomerates.
Thus, he said, Islamic finance players in Malaysia must be aware that the industry was no longer the exclusive domain of Islamic institutions or Islamic intermediaries.
He said the potential market for Islamic finance was 'extremely huge' with estimated assets held in Shariah-compliant accounts worldwide amounting to between US$200 billion and US$500 billion (RM754billion to RM1,885 billion).
He revealed that the size of this market was growing at 10 to15 percent annually with Malaysia, Bahrain, United Arab Emirates leading the race to create premier Islamic banking hubs to serve the world's estimated 1.2 billion Muslims.
Najib said that Malaysia's Islamic finance and banking sector required further research and study while its investment in human capital should be further improved.
Embrace technology
He noted that in Malaysia, experts in both finance and Shariah were scarce as local talents were attracted by other countries and global conventional banks.
The deputy premier said there was an urgent need to create a greater awareness on Islamic finance at all levels both Muslim and non-Muslim through research, education and training.
He also emphasised that Islamic banks should not shy away from embracing technological know-how and advancement. "Islamic banks must exploit the opportunities offered by modern technology to improve their distribution channels and back office operations to the same extent as conventional banks," he said.
Najib stressed that issues related to regulation and supervision should be equally and adequately addressed so as to bring Islamic banks and financial institutions on par with the international standards.
He added that there was also an urgent need to thoroughly address the issue of key performance indicators which were applicable to all Islamic financial institutions both locally and globally.
"What I mean is that Malaysia may have had a head start but this will not be with us forever," he said in his keynote address when opening the Islamic Finance Forum 2005 in Kuala Lumpur.
According to Bernama, Najib said Malaysia was facing enormous competition from other countries as well as international banking conglomerates.
Thus, he said, Islamic finance players in Malaysia must be aware that the industry was no longer the exclusive domain of Islamic institutions or Islamic intermediaries. He said the potential market for Islamic finance was 'extremely huge' with estimated assets held in Shariah-compliant accounts worldwide amounting to between US$200 billion and US$500 billion (RM754billion to RM1,885 billion).
He revealed that the size of this market was growing at 10 to15 percent annually with Malaysia, Bahrain, United Arab Emirates leading the race to create premier Islamic banking hubs to serve the world's estimated 1.2 billion Muslims.
Najib said that Malaysia's Islamic finance and banking sector required further research and study while its investment in human capital should be further improved.
Embrace technology
He noted that in Malaysia, experts in both finance and Shariah were scarce as local talents were attracted by other countries and global conventional banks.
The deputy premier said there was an urgent need to create a greater awareness on Islamic finance at all levels both Muslim and non-Muslim through research, education and training.
He also emphasised that Islamic banks should not shy away from embracing technological know-how and advancement. "Islamic banks must exploit the opportunities offered by modern technology to improve their distribution channels and back office operations to the same extent as conventional banks," he said.
Najib stressed that issues related to regulation and supervision should be equally and adequately addressed so as to bring Islamic banks and financial institutions on par with the international standards.
He added that there was also an urgent need to thoroughly address the issue of key performance indicators which were applicable to all Islamic financial institutions both locally and globally.
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