KUALA LUMPUR, Nov 30 – Malaysian financial services firms have an excellent opportunity to play a role in the growth of Islamic finance in the Gulf region, said an official at the Central Bank of Bahrain. Mohammed Ayman Al Tajer, Director of Financial Institutions Supervision Directorate at the Bahraini Central Bank, said vast opportunities in the Gulf are helped by strong economic growth in the region and demand for more sophisticated financial services.
“The banking sector will clearly play a large part in the opportunities available, but there are also growing opportunities in areas such as insurance and fund management as the financial sector in the Gulf continues to diversify,” he told Bernama in an email interview. There are 23 Islamic banks, with assets under management of about US$24.6 billion up until July 2013, as well as seven Islamic insurance companies (takaful and retakaful) operating in the Kingdom.
The country has 41 locally domiciled Shariah-compliant funds, more than 40 per cent of the total number of locally domiciled funds. He added that the Islamic finance industry continues to perform strongly following robust economic growth, introduction of new products and services as well as acceptance in non-Muslim nations.
“The entrance to the sector of new, established financial centres like London bodes well for Islamic finance. “The larger the industry becomes, the more it benefits all involved — as London’s Islamic finance sector expands, it will open new opportunities for Malaysian and Bahraini institutions to play a role,” he noted. While a lot has been done to develop the Islamic finance industry, more can be done to strengthen it, said Mohammed Ayman.
He said standardisation remains the key challenge in the industry, alongside lack of trained professionals and scholars as well as awareness of Islamic finance. “The more we are able to boost standardisation in products and services, the easier it will be to lower costs in the industry and lower the difference between conventional and Shariah-compliant finance,” he added.