Islamic finance can make its mark globally

Chairman: Indonesia should be involved in mega project

KUALA LUMPUR: With Malaysia being the centre of Islamic finance in the world, the formation of a mega Islamic bank is an opportunity for Malaysia to make its mark globally.

Indonesia should also be involved in the formation of this mega Islamic bank in Malaysia, as there cannot be a mega Islamic bank without involving a mega Islamic country,” said Indonesian Islamic Banking Association (ASBISINDO) chairman and CIMB Islamic Bank Bhd independent non-executive director Dr A. Riawan Amin.

On Tuesday, Tan Sri Datuk Dr Zeti Akhtar Aziz said that Bank Negara would announce one mega bank this year, under its plan to issue up to two mega Islamic banking licenses.

Dr A. Riawan Amin ... ‘In time, the world will embrace the values of Islamic finance as the norm.’

“Indonesia, by virtue of its population of 250 million people, is the promise of the future for Islamic finance,” said Riawan.

He opined that while the centre of the mega bank should be Malaysia, the capital and human resource should be global in nature.

As Islamic finance was presently still small, representing less than 5% of the total global financial sector, Riawan said that the mega bank in Malaysia was a good opportunity for Islamic finance to make its mark globally.

“Now you have your Citibanks and HSBCs. We cannot follow their model, as there are already so many established players doing the same thing. We don’t become champions playing someone else’s game. The mega bank is a chance for Malaysia to have that kind of global dominance,” said Riawan.

He lauded Malaysia, saying that among the Muslim nations, it was the Malaysian government that was the boldest and most determined in promoting Islamic finance.

“The world is already moving towards Islamic finance. In time, the world will embrace the values of Islamic finance as the norm,” said Riawan.

Citing an example, he added that there would have been no subprime mortgage crisis if one Islamic principal was practised: Don’t buy and sell debt.

Meanwhile, Riawan was in Malaysia to sign a partnership agreement between ASBISINDO and Muslim World Search Engine Sdn Bhd (MWSE) on Monday.

MWSE, which is the world’s largest Muslim search engine, would help promote ASBISINDO’s member’s products and services through its reach, particularly in the Middle East.

ASBISINDO has a total of 150 members, with a total of 6,000 outlets in Indonesia. For starters, MWSE would promote products and services for five of ASBISINDO’s member banks, which has a total customer base of four million people.

MWSE executive chairman Datuk Mustapha Yaakub said that MWSE was not in competition with search engines Google or Baidu, but to co-exist together harmoniously.

Currently, MWSE has a reach of 20 countries in the Middle East and Africa. It also has a reach in Indonesia and Malaysia.

“Our Muslim search engine caters to the Muslim world, with the ranking of information that is in line with what is right for the Muslim community,” said Mustapha.

“This collaboration with ASBISINDO, this is a milestone for us. With the penetration into a mega Islamic country, it reduces our lag time by three to five years, as our customer base is immediately increased. We have been making good progress since we rolled out five months ago,” said Mustapha.