Common standards needed to globalise Islamic finance

Institution : 2. International Shariah Research Academy for Islamic Finance - ISRA, Association of Shariah Advisor in Islamic Finance Malaysia - ASAS, Finterra Technologies Sdn Bhd
20 February, 2019      71

 

 

KUALA LUMPUR: Malaysia supports Qatar Financial Centre’s proposal to have common platforms and technology with other nations to serve the US$2 trillion global Islamic finance market.

“Malaysia supports the initiative to have common standards with other financial hubs to instil confidence in Islamic finance,” said International Shari’ah Research Academy for Islamic Finance (ISRA) executive director Professor Dr Mohammad Akram Laldin.

He noted that Malaysia is a global pioneer in the capital markets, having established the first Islamic bank in 1983 and initiated the first Islamic insurer in 1984.

Malaysia continues to be one of the world's biggest issuers of sukuk, or Shariah-compliant bonds, amounting to RM112.4 billion as of December last year. This value represented a third of the global market.

He recalled that Bank Negara Malaysia had signed a memorandum of understanding with the regulatory authorities of Qatar and Dubai in 2007 to promote mutual cooperation.

For more than a decade, efforts to consolidate the fragmented global Islamic finance industry has not reached consensus. This is marred by regional rivalries and a lack of common standards.

“We need to be more committed to forge common standards in legality, taxation and governance of Islamic finance with as many nations,” said Akram told reporters on the sidelines of the Islamic Fintech Dialogue 2019 (IFD 2019) here today.

ISRA, established in 2008 by Bank Negara, is an Islamic finance research institution, focusing on Shariah compliance.

The IFD 2019 was organised by ISRA in collaboration with Finterra and the Association of Shariah Advisors (ASAS) to facilitate and develop Islamic economics on a global scale.

Also present at the seminar were CyberSecurity Malaysia chief executive officer Datuk TS Dr Amirudin Abdul Wahab and ASAS president Associate Professor Dr Aznan Hasan.

Akram was responding to a recent suggestion by Qatar Financial Centre chief executive officer Yousef Mohamed Al Jaida that three Muslim countries namely Qatar, Malaysia and Turkey can work together to globally raise the profile of Islamic financing.

“We have this vision that Turkey would cover Islamic finance needs in Europe, Qatar would serve the greater Middle East and Malaysia would sell to Asia,” QFC’s Yousef had reportedly said on the sidelines of the Doha Forum 2018 two months ago.

Currently, established financial hubs such as the London Stock Exchange is a global venue for the issuance of sukuk, while Hong Kong and Luxembourg have also made inroads but QFC believes the market should be led by Muslim countries.

Islamic finance prohibits interest payments, speculative activity and profiting on “uncertain” transactions.

Businesses or industries concerning pork, alcohol and tobacco are ruled as non-compliant with Shariah laws.


Original Source: https://www.nst.com.my/business/2019/02/461597/common-standards-needed-globalise-islamic-finance


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