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Thursday, Oct 30 , 2014 ( Muharram, 1436)

Updated:10:00 PM GMT

Global Islamic Banking Forum in Malaysia

By OnIslam & News Agencies ,
5973
Malaysia is keen to become the main hub of the rapidly-growing Islamic banking drive.
KUALA LUMPUR — Major players of the rapidly-growing Islamic banking will gather on Monday, March 26, in Kuala Lumpur as the Southeast Asian country works to take the lead of the global drive.

"The forum will provide an avenue for global investors, issuers and financial industry players to discuss investment and business opportunities in Asia," Malaysia's Central Bank, the organizer, said in a statement cited by Agence France Presse (AFP).

The Global Islamic Finance Forum (GIFF) will bring together 800 central bank governors and industry players from Muslim countries.

The four-day gathering, themed "Fostering linkages in Islamic Finance", will highlight business opportunities and contemporary issues relating to Islamic finance.

Azrul Azwar, a senior economist at Malaysia's Bank Islam, said the main topic will likely be the differences in the interpretation of compliance with Shari`ah.

"I think this is one of the challenges that Malaysian regulators should address," Azrul told AFP.

He said countries in the Middle East have a more strict interpretation of Shari`ah rules, compared to Southeast Asian nations.

"We should work towards higher convergence of Shari`ah interpretation."

The Islamic Financial Services Board -- an international standard-setting body that regulates the Islamic financial industry -- will hold its high-level annual meeting on the sidelines of the forum.

Islamic banking operates by sharing profit or loss between the bank and its clients, instead of interest, which is forbidden.

Islam forbids Muslims from receiving or paying interest on loans.

Ambitious

The forum comes to highlight Malaysia's ambitious efforts to promote itself as an international hub for Islamic finance.

"This will showcase Malaysia as a country with the capability, capacity and human resources to provide Islamic financial services," Meor Amri Meor Ayob, who rates Islamic financial instruments at Rating Agency Malaysia, told AFP.

He maintained that Malaysia has the infrastructure and a vibrant capital market that is "very conducive" for the growth of Islamic finance.

He underlined "a lot of opportunities for Islamic banking" in Malaysia because the industry is still young.

Malaysia has been promoting itself as a hub for Islamic finance but faces rivalry from neighboring Singapore and Brunei.

The predominantly Muslim country changed the law to allow Islamic banking in 1983.

It has now 10 fully-fledged Islamic banks, while a series of conventional banks also offer Islamic financial services.

The Islamic banking industry, which began almost three decades ago, has made substantial growth and attracted the attention of investors and bankers across the world.

There are an estimated 300 Islamic banks and financial institutions worldwide whose assets are predicted to grow to $1 trillion by 2013.

Western financial institutions, including Citigroup, Deutsche Bank, HSBC and UBS, are increasingly offering Islamic products.

Related Links:
Islamic banking Making Impressive Strides
British Bank Launches Islamic Mortgage
Japan Joins Booming Islamic banking
HSBC Holding to pick Malaysia as Takaful Hub
First Foreign Islamic Bank to Open in Malaysia

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