Malaysia aims to collaborate with Oman to develop Islamic finance

KUALA LUMPUR: Malaysia is looking forward to collaborating with Oman to address challenges in developing the Islamic finance industry, says the Regent of Perak Raja Nazrin Shah.

He said a potential area of collaboration and an issue faced by the industry today was human capital development, and Malaysia had established several institutions to provide training for Islamic finance professionals.

“These institutions include the International Centre for Education in Islamic Finance, the Islamic Banking and Finance Institute of Malaysia and the Securities Industry Development Corp.

“Leveraging on these institutions, Oman and Malaysia can embark on joint initiatives to develop a pool of professionals to drive innovation and growth of the Islamic finance industry,” he said when addressing theOman Islamic Economic Forum 2013 in Muscat yesterday.

Raja Nazrin said Malaysia’s Islamic banking assets reached US$164.9bil (RM501.71bil) as at end-December last year, with an average growth rate of between 18% and 20% annually, while total assets of its Takaful industry amounted to US$6.4bil, with a market penetration rate of 13%.

“The Islamic capital market reached a size of US$460bil, as at end-2012, after registering an average growth of about 14% per annum over the past decade,” he said.

On the global front, Raja Nazrin said the industry posted an annualised growth rate of almost 15% over the past 10 to 15 years to reach a size of about US$1.3 trillion.

He said that while this growth was achieved primarily in Muslim-majority countries, an increasing number of non-Muslim-majority jurisdictions have also been developing their Islamic finance industry, including the UK, Luxembourg and Hong Kong.

“The size of Islamic financial assets is forecast to reach US$1.8 trillion by 2016, while cross-border financing and investment activities are expected to accelerate, especially in the Islamic capital market, as emerging economies embark on infrastructure spending,” he added.

Raja Nazrin, who is also the financial ambassador of the Malaysia International Islamic Financial Centre, said that bilateral trade between Oman and Malaysia rose significantly to US$740mil in 2011 from US$265mil in 2010. – (Bernama, 2 May 2013)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com