ID :
87715
Tue, 11/03/2009 - 23:52
Auther :
Shortlink :
https://oananews.org//node/87715
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SIGNIFICANT SUCCESS FOR MALAYSIA IN ISLAMIC FINANCE, SAYS PM
KUALA LUMPUR, Nov 3 (Bernama) -- Prime Minister Najib Razak said Malaysia
has achieved significant success in Islamic finance which at end June this year
accounted for close to 19 per cent of the country's banking assets.
As at end-August, the Islamic capital market too had reached RM803 billion
(US$234 billion), representing 54 per cent of Bursa Malaysia's market
capitalisation.
"Total financing now amounts to RM115 billion and constitutes 15.5 per cent
of the total financing portfolio of the banking industry. Net non-performing
financing remains low at 2.4 per cent," he said.
In his keynote address at the Sixth Annual Kuala Lumpur Islamic Finance
Forum (KLIFF) here today, the Prime Minister said the country is also seeking to
enhance its connectivity in Islamic Finance with other financial centres through
Malaysia International Islamic Financial Centre (MIFC).
"For this purpose, Malaysia has entered into agreement via a memorandum of
understanding with various jurisdictions for greater collaboration and
engagement of mutual benefits in Islamic finance," he said.
He said Malaysia will continue to lead the way in expanding the outreach of
Islamic finance, and therefore more MoUs signing with jurisdictions in other
parts of the world are expected in the future.
In his address, Najib said Islamic finance was a strategic vital element in
the world's recovery from a financial crisis that has shaken both finances and
faith in banking institutions.
"Although Islamic finance has largely escaped the ravages caused by
overzealous financial innovation and imprudent lending practices which were at
the heart of the global financial crisis, we cannot afford to be complacent," he
said.
He said it was imperative for the industry to draw upon the lessons learnt
to ensure that it can avoid any such financial instability in the future.
Najib also highlighted several key drivers to ensure continuing resilience
of Islamic finance in withstanding the impact of current and future crisis.
"Firstly, ensuring that innovation in Islamic finance remains grounded in
Maqasid al Shariah (objectives of Syariah) which serves to anchor the business
paradigm of Islamic finance in realisation of benefits to the people."
Then, innovation must also be supported by strong governance practices which
hold true to the needs of Islamic financial institutions.
It must also be ensured that risk management systems have appropriate
safeguards and keep pace with the sophistication of innovation in Islamic
finance, the prime minister said.
There is a need to ensure a comprehensive and supportive infrastructure - a
legal, regulatory and supervisory framework that addresses the unique elements
of Islamic finance industry development.
"This needs to be additionally supported by institutional arrangements for
expedient, effective and cost efficient resolution of troubled financial
institutions and a financial safety net framework that encompasses the lender of
last resort and a deposit insurance system," he added.
-- BERNAMA
has achieved significant success in Islamic finance which at end June this year
accounted for close to 19 per cent of the country's banking assets.
As at end-August, the Islamic capital market too had reached RM803 billion
(US$234 billion), representing 54 per cent of Bursa Malaysia's market
capitalisation.
"Total financing now amounts to RM115 billion and constitutes 15.5 per cent
of the total financing portfolio of the banking industry. Net non-performing
financing remains low at 2.4 per cent," he said.
In his keynote address at the Sixth Annual Kuala Lumpur Islamic Finance
Forum (KLIFF) here today, the Prime Minister said the country is also seeking to
enhance its connectivity in Islamic Finance with other financial centres through
Malaysia International Islamic Financial Centre (MIFC).
"For this purpose, Malaysia has entered into agreement via a memorandum of
understanding with various jurisdictions for greater collaboration and
engagement of mutual benefits in Islamic finance," he said.
He said Malaysia will continue to lead the way in expanding the outreach of
Islamic finance, and therefore more MoUs signing with jurisdictions in other
parts of the world are expected in the future.
In his address, Najib said Islamic finance was a strategic vital element in
the world's recovery from a financial crisis that has shaken both finances and
faith in banking institutions.
"Although Islamic finance has largely escaped the ravages caused by
overzealous financial innovation and imprudent lending practices which were at
the heart of the global financial crisis, we cannot afford to be complacent," he
said.
He said it was imperative for the industry to draw upon the lessons learnt
to ensure that it can avoid any such financial instability in the future.
Najib also highlighted several key drivers to ensure continuing resilience
of Islamic finance in withstanding the impact of current and future crisis.
"Firstly, ensuring that innovation in Islamic finance remains grounded in
Maqasid al Shariah (objectives of Syariah) which serves to anchor the business
paradigm of Islamic finance in realisation of benefits to the people."
Then, innovation must also be supported by strong governance practices which
hold true to the needs of Islamic financial institutions.
It must also be ensured that risk management systems have appropriate
safeguards and keep pace with the sophistication of innovation in Islamic
finance, the prime minister said.
There is a need to ensure a comprehensive and supportive infrastructure - a
legal, regulatory and supervisory framework that addresses the unique elements
of Islamic finance industry development.
"This needs to be additionally supported by institutional arrangements for
expedient, effective and cost efficient resolution of troubled financial
institutions and a financial safety net framework that encompasses the lender of
last resort and a deposit insurance system," he added.
-- BERNAMA
