M`SIA STILL WELL-POSITIONED AS ISLAMIC FINANCE LEADER, SAYS PM

KUALA LUMPUR, Jan 19 (Bernama) -- Malaysia is still well-positioned to
continue playing the role of a world leader in Islamic finance, Prime Minister
Najib Razak told the Gulf News in Abu Dhabi.

Among the country's plans for financial liberalisation, he said, was the
issuance of two licences for two mega-Islamic banks in Malaysia with a capital
of more than US$1 billion each.

"We receive very encouraging interest to participate in the new Islamic
banks that we have announced," he said in the exclusive interview conducted on
the sidelines of the World Future Energy Summit.

The prime minister who was on an official visit to the United Arab Emirates
(UAE) from Jan 17 to Jan 19, also said Malaysia was working on having an "iconic
physical centre" to house all its Islamic institutions that deal with Islamic
finance.

Najib attributed Malaysia's distinction in Islamic finance as well as its
strong emotional and spiritual bond as among the factors that bring it closer to
the Arab region in general and the Gulf countries in particular.

"Ever since Islam reached the shores of our part of the world, we have
enjoyed this strong emotional and spiritual [bond] with this part of the world,
and that [bond has] remained strong until today. And because of this natural
affinity, and natural identification with this part of the world, trade flows
naturally," he said.

To a question on the impact of the global financial crisis on Islamic
finance structure, Najib said the Islamic banking system managed to weather the
financial crisis due to its well-regulated foundation and the fact that it did
not depart from its fundamental principles.

He said Islamic finance was unlike conventional banking that had many new
financial products not based on fundamentals but operated on different premises.
-- BERNAMA