Opportunities For Islamic Finance To Lead Financial Fraternity, Says PM

KUALA LUMPUR, Nov 12 -- There are tremendous opportunities for Islamic finance to lead the financial fraternity into a new growth era, Prime Minister Datuk Seri Abdullah Ahmad Badawi said Wednesday.

"As many of you are already aware, Islamic finance is a system that is based on the principle of profit-sharing, where both parties in the contract are subjected to the potential losses and returns," he said at the official launch of Standard Chartered Saadiq Bhd, the bank's first Islamic financial centre, at Taman Tun Dr Ismail here.

Abdullah said the recent global financial meltdown illustrated the desperate need for such a system and many observers were increasingly considering the Islamic financial system with renewed respect and admiration.


Therefore, he said, Islamic finance must be prepared to take on a new dimension to meet the changing demands of business in an increasingly globalised environment.

"In this regard, Islamic finance needs to quickly integrate itself with the international financial system and prove itself as a viable alternative to the conventional financial system practised in most parts of the world," Abdullah said.

He said by transforming into an essential element of global finance, Islamic finance would surely ended its perceived position as a niche or boutique financial service.

However, Abdullah said for Islamic finance to be an effective complement to global finance, a sound legal framework was important to provide the Islamic finance sector with the credibility it required.

"As it stands, Malaysia is well poised to lead any attempt to reform the global financial system by infusing concepts and themes borrowed from Islamic finance," he said.

In this respect, the Prime Minister said Malaysia was ready to act as a knowledge centre for Islamic finance.

"Already, we have founded the International Centre For Education in Islamic Finance as a global university for Islamic finance," he said.