Following the trends of the last few years, existing markets in Islamic finance will continue to grow for the unforeseeable future. A shift from state-owned to private assets will likely promote the use of shari`a compliant funds. The extent to which
In order to continue growth, the Islamic finance market needs a strong secondary market enhanced by greater liquidity and price transparency. There is a need for flexible and shari`a compliant liquidity management tools, as well as a shift from primarily sort-term deposits to long-term deposits. Islamic banks also encounter difficulty managing mismatched asset and liability portfolios due to the absence of an inter-bank market.
The difficulty in obtaining meaningful accurate data on the Islamic finance industry, combined with a general lack of disclosure and transparency, makes the Bank Negara Malaysia Annual Report 2003 a valuable statistical tool for end users. With the possible exception of Malaysia, countries need to provide better and greater access to information regarding Islamic banks' performance, fostered through a culture of disclosure and transparency.
The Malaysian financial sector is receiving a boost from newly enacted consumer protection regulations and efforts to promote greater financial inclusion, the latter being an effort to provide lower-income and rural customers. Among these changes include more stringent transparency and disclosure regulations adopted by Bank Negara. Like conventional banks, Islamic banks have had a tendency to be more concerned with share-holder value and profits over providing greater access and more beneficial services to the entire population and maintaining a level of social responsibility.
An interview with Abdul Rais Abdul Majid, CEO of International Islamic Financial Market (IIFM) of Bahrain.
The Arab Banking Corporation has launched their Alburaq line of products, with the initial offering being an Islamic mortgage, available to customers in the Middle East and Europe. Currently in the UK, Islamic
Perhaps the most effective tool to fight corruption is the availability of financial information to the public. There is a direct link between corruption and the amount of transparency and quality of governance. Women leaders appear to be less susceptible to corruption, though with the exception of Malaysia, are largely restricted from leadership positions in
The International Investor (TII) of Kuwait and Dallah AlBaraka Group (DBG) of Bahrain have reached a settlement in London in response to the failed merger of 2002. The outcome is that DBG will compensate TII in cash and assets, while still retaining a 15% share in TII. This settlement should help to stimulate both groups and provide an opportunity for improvements in management.