Islamic Industry Continues to Grow

785 WordsJul 15, 20184 Pages
The Islamic finance industry continues to grow following continued internationalisation efforts. Last year’s growth was an impressive 16.5%, accounting for 25.7% of total assets in the banking system. The foreign currency business also grew with assets amounting to RM 18.1 billion in 2013. Meanwhile in the takaful sector, total assets of takaful funds grew by 10% to RM20.9 billion, while total takaful contributions accounted for 14% of total premiums in the industry. To increase the potential return to contributors, takaful operators were allowed to invest abroad any amount of investment-linked funds of resident clients. This is an increase from the previous limit of 50% of net asset value. Bank Negara Malaysia gave the `Emas’ status to…show more content…
To comply with liquidity requirements, the sukuk has been accorded regulatory recognitionas a liquid asset and a low-risk credit under the capital adequacy framework applicable to banking institutions. To increase the investor base of foreign sukuk, the government issued an inaugural GII of RM 4 billion in July 2013 based on the murabahah concept. This was intended to replace the bai’inah concept which was used earlier. Under the new concept, the contract is a certificate of debt for a deferred sale transaction of an asset based on Shari’ah principles. It is hoped this concept will attract more domestic and international investors and increase the value of Malaysia’s sukuk market. Fortunately it did when the issuance was over subscripted by nearly three times. On 1 August 2013, the Prime Minister unveiled the Malaysia International Islamic Financial Centre’s new brand ` Malaysia: World’s Islamic Finance Marketplace’. It promotes the rapidly expanding connectivity of Malaysia’s Islamic financial institutions with the global banking community. A robust financial infrastructure will enable better cross-border multi-currency transactions. In conjunction with the launch, the enhanced MIFC portal was also rolled out. Major enhancements include Islamic finance news feeds, live market data, thematic analyses and
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