IslamicFinance.de

Singapore's strength in conventional financing and capital markets can be adapted to meet the needs of Islamic banking, said Monetary Authority of Singapore (MAS) deputy managing director Jacqueline Loh yesterday. She added that conventional finance and Islamic banking are similarly cross-border in nature. Islamic capital-market activities in Singapore have taken off, with 31 sukuk issuances over the past five years. Ms Loh said sukuks are ideal for funding infrastructure projects and would complement work by Singapore as they are asset-backed and can involve more capital-market participants. MAS is also working with the industry and other government agencies to establish sukuk regulatory and tax regimes.

Japan's three megabanks are considering whether and how they will offer financial services under Islamic law overseas now that the Financial Services Agency will allow them to engage in such operations at their foreign branches starting as early as April. Mitsubishi UFJ Financial Group would offer deposit and lending services that are permissible under Sharia at its Dubai branch in the United Arab Emirates as early as fiscal 2015, pending approval from the local authorities. Sumitomo Mitsui Banking Corp. may offer similar services at its branches in Dubai and Singapore. Mizuho Financial Group likely will make its London branch the operational centre for Islamic finance in the Middle East.

Malaysian Prime Minister Datuk Seri Najib Tun Razak thinks that the maximum potential of the Islamic economy, including finance, banking, industry, waqaf and the insurance takaful, is still not fully realised. However, there are many challenges that need to be addressed: strong support from the political leadership to make things happen; institution building; human capital development; the shortage of expertise in many areas like Islamic finance, standardisation and regulatory framework; syariah experts to make sure your products are syariah-compliant, among others. Regarding SMEs, Malaysia has a masterplan for their development, with the goal to make SMEs achieve about 41 per cent of GDP by 2020.