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MIFC's role vital to drive Islamic finance growth

Publish date: Thu, 30 Nov 2023, 09:26 AM

KUALA LUMPUR: Concerted initiatives such as the Malaysia International Islamic Financial Centre (MIFC) are important to strengthen the Islamic finance structure in Malaysia and develop the sector in line with the Madani Economy agenda, said Deputy Finance Minister I Datuk Seri Ahmad Maslan.

He said MIFC's role began in 2006 as an initiative by the financial market regulatory body in collaboration with relevant government agencies to develop the Islamic finance sector in Malaysia through the involvement of industry and government.

"It is also tasked to strengthen the direction to promote Malaysia as a major Islamic financial hub at the international level," he said at the Dewan Negara today (November 29).

He was responding to a question from Senator Datuk Dr Mohd Hatta Md Ramli on the government's readiness to re-establish a more comprehensive special committee on Islamic finance to further strengthen the Islamic financial structure in Malaysia.

Besides that, he said Bank Negara Malaysia (BNM) and the Securities Commission (SC) collaborated to establish the Malaysia International Islamic Financial Centre Leadership Council (MIFC Leadership Council) on October 5, last year in line with the ecosystem development to drive the next phase of development in strengthening Malaysia as an international Islamic financial centre.

Ahmad said the leadership council, chaired by Tan Sri Azman Mokhtar and composed of local and international industry figures as well as BNM and SC representatives, served as a platform to provide industry leadership in efforts to strengthen Malaysia as a global market and international gateway for Islamic finance.

He said as of now, Malaysia's leadership in Islamic finance continued to be recognised at the global level, ranking first for ten consecutive years in the "ICD-Refinitiv Islamic Financial Development Indicator", in line with the development of a comprehensive and increasingly mature Islamic financial ecosystem in Malaysia with participants who are dynamic, resilient and capable of producing diverse products.

Meanwhile, he said the banking sector's Shariah-compliant financing and loans increased to 44.7 per cent this year compared with 31.3 per cent in 2015 and 15.2 per cent in 2010.

The conventional banking sector is at a level of 55.3 per cent this year.

"In terms of Islamic capital market data, the Islamic capital market is now 64.18 per cent amounting to RM2.4 trillion and out of the 982 listed companies, 804 are Shariah-compliant and 178 are conventional.

"In terms of Islamic insurance takaful, the growth is very positive. In 2010 only 12.6 per cent, this year it is 24.8 per cent," he said.

He said Malaysia leads the global sukuk market with a market share of 39 per cent.

"In the Islamic financial index, Malaysia is in first place, (followed by) Saudi Arabia in second place, Indonesia (third), Bahrain (fourth) and Kuwait (fifth)," he said. -BERNAMA

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