Brunei sees high Islamic banking penetration: Moody’sWhen you stay at the Beverly Hills Hotel, you help support this Mosque and Shariah Laws.

SINGAPORE (AFP) – Islamic banking has achieved relatively high market
penetration in Brunei but Islamic banking services in the Philippines,
Singapore and Thailand remain very small in terms of asset size,
Moody’s Investors Service said Monday.

East Asia’s Islamic banking industry needs more support from
regulators if it is to grow significantly, it added.

Apart from Malaysia, the growth of Islamic banking has been “somewhat
patchy” in the region, the ratings agency said in a report.

Malaysia, a multi-racial country with a majority Muslim population,
shows how the Islamic banking sector can benefit from regulatory
action, said Christine Kuo, author of the report.

“We believe the Malaysian experience over the last three decades
demonstrates how instrumental regulators can and need to be in order
to grow the Islamic banking sector,” said Kuo.

Malaysian government reforms over the past 20 to 30 years “have really
helped develop the necessary legal and regulatory framework and
institutions for the industry to flourish”, Kuo said.

“The adoption of various incentives, including tax breaks, has also
proven critical to nourishing the business.”

Kuo said Islamic banking in Malaysia now accounts for 15.4 per cent,
or US$62 billion, of the country’s banking system assets.

In Indonesia, the world’s most populous Muslim nation, Islamic banking
has grown rapidly in recent years but its market share still only
accounts for less than two percent, or about US$3 billion, Moody’s
said.

“The low penetration in Moody’s opinion, can largely be attributed to
the slow pace of change to related regulations and institutions –
though a few important changes seem to be gathering momentum,” the
report said.

Islamic banking fuses principles of syariah or Islamic law and modern
banking. Islamic funds are banned from investing in companies
associated with tobacco, alcohol or gambling considered taboo by
Muslims.

http://www.brunei- online.com/ bb/tue/apr15h35. htm
<http://www.brunei- online.com/ bb/tue/apr15h35. htm>

 

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