`Competition to spur innovation' [Business Times (Malaysia)]
(Business Times (Malaysia) Via Acquire Media NewsEdge) MANAMA: COMPETITION among countries vying for the Islamic finance hub crown should not be seen as a threat but rather as an incentive to spur more innovative offering and services.
"Competition between these hubs such as Malaysia, London, Bahrain and Dubai to be the best provider of Islamic finance services and products will ultimately be healthy for the industry as a whole," said Khairul Nizam, deputy secretary-general of Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).
"It is not possible for just one hub to cater to the demand and the needs of the global Islamic finance industry. With more players in the market, there will be more liquidity, offerings and innovation for the potential investors," Khairul said in an interview at the 20th World Islamic Banking Conference (WIBC) in Bahrain yesterday.
Khalid Hamad, executive director of banking supervision of the Central Bank of Bahrain, agreed.
"I don't believe in centres per se as investors will look at the framework and legislation before investing, but the more players in the market, the more diversity it is for the potential investors," he said.
Bahrain-Malaysia trade, according to the Economic Development Board of Bahrain, is currently low but has the potential to increase in the future, given its existing Islamic banking partnership.
"Malaysia and Bahrain are what I would like to call 'habitual issuers' in terms that we are always issuing sovereign short-term sukuk. But our similarity and partnership go beyond that," said Khalid.
"We are both partners and members of many Islamic finance bodies such as the AAOIFI and the Islamic Financial Services Board. We have also signed an MoU towards the development of further cooperation between the nations," he added.
He noted that Malaysia remains an attractive investment hub for Bahrain.
This is the 20th year the WIBC is being held, featuring 90 speakers and 1,030 participants, to discuss various topics, including "Developments and opportunities in Islamic banking" and "Expanding the global reach and depth of Islamic finance".
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