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Madinat al-Muslimeen Islamic Message Board
| Muslim countries sign pact to boost Islamic bankin |
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| jaihoon |
| 11/03/02 at 23:14:15 |
| Muslim countries sign pact to boost Islamic banking khaleejtimes.com KUALA LUMPUR - Central banks from seven Muslim countries on Sunday launched a regulatory body to oversee the booming Islamic investment market. The Islamic Financial Services Board (IFSB) was inaugurated here by founding members Malaysia, Saudi Arabia, Indonesia, Iran, Kuwait, Pakistan, Sudan and the Islamic Development Bank. The establishment of the IFSB -- an association of central banks, monetary authorities and other institutions responsible for supervising and regulating Islamic banking -- was "in response to the growing significance of the Islamic financial services industry," officials said. It is the culmination of two years of work by the founding members, with support from the International Monetary Fund and the Accounting and Auditing Organisation for Islamic Financial Institutions. The Islamic financial market worldwide is estimated to be worth 200 billion dollars and is growing at 15 percent a year. Economists say there has been a boom particularly in the aftermath of the September 11 terror attacks in the United States as investors pulled funds out of the West. Malaysian Prime Minister Mahathir Mohamad said at the IFSB launch on Sunday that the option to use the Islamic financial system must be open and voluntary so as not to cause turmoil and economic regression. The system combines Islamic laws against interest payments with modern banking principles. Bankers have hailed the IFSB as a major boost to Islamic banking and finance globally, saying it would serve as an avenue to develop uniform interpretation of Islamic Sharia laws for processes, financing modes and regulatory standards. "It will give Islamic banking players more credibility and firmer ground to compete against conventional banks either locally or internationally," said SBB Islamic Banking Group manager Nordin Yahaya. The growing market share for Islamic investments signified strong demand for Sharia compliant financial products worldwide, he said. There was "immense potential for business opportunities" with experts estimating the wealth of Islamic nations -- home to one-fifth of world's population -- at around 800 billion to one trillion dollars, he said. Bank Islam Malaysia managing director Ahmad Tajudin Abdul Rahman said it would improve efficiency in the industry and enhance Malaysia's prospects of becoming a regional centre for Islamic banking and finance. He said a growing number of non-Muslims were investing in Islamic products, which were deemed more competitive and cost-saving. Islamic banking was first introduced in mainly-Muslim Malaysia in 1983, and now has an eight percent share of assets in the banking sector. The government aims to raise the level to 20 percent by 2010. - AFP |
Madinat al-Muslimeen Islamic Message Board |