Islamic Banking Set To Attain 20 Percent Target
Islamic banking is on track towards attaining the target of representing 20 percent of the financial market by 2010, said Minister in the Prime Minister’s Department, Datuk Mustapa Mohamed.
"The target is achievable. At present, it is already 11 percent and 20 percent is achievable," he told reporters after officiating Islamic Banking and Takaful Week 2005 (IBTW 2005) here Thursday.
According to Mustapa, Islamic banking in the country is growing at a rapid pace, faster than the domestic conventional banking and Islamic banking overseas.
For the past five years, the Malaysian Islamic banking industry grew at annual rate of 19 percent compared to between 10 and 15 percent annually elsewhere in the world.
IBTW 2005 was organised by the Association of Islamic Banking Institutions Malaysia and Bank Negara Malaysia.
In his speech, Mustapa welcomed the move by Bank Negara to encourage Islamic banking operations to be conducted by subsidiaries of conventional banks.
He said with this strategy, more attention could be given to the development of Islamic financial products and services in advancing the industry.
Mustapa said Malaysia now has six Islamic banks, 16 conventional banks and four development finance institutions with window for Islamic banking and four takaful companies.
There are also 70 Islamic unit trusts and various supporting institutions and mechanism like Cagamas, Credit Guarantee Corporation and Islamic indexes, he added.
Islamic banking assets have increased to over RM100 billion by end of July this year from only RM1.4 billion in 1990, Mustapa said.
He said the assets of the takaful industry rose to over RM5 billion by end of July this year from RM300,000 10 years ago.
Mustapa called on Bank Negara and institutions of higher learning to hold more courses on Islamic banking in order to raise the level of skill and expertise.
On plans to set up an education centre for international Islamic finance, he said: "I understand that an initiative is being undertaken to realise such a centre."
