SOUTHEAST Asia and the Gulf Cooperation Council (GCC) nations are the two largest Islamic finance hubs but there are not many cross-border transactions between them, said Dubai-based Noor Investment Group chief executive officer, Hussain Al Qemzi.
Hussain said if both could not trade among themselves, then they were not doing it right.
"If we are to challenge the conventional banks' entrenched position in international financial deals, we must develop the capacity to structure multi-currency and cross-border transactions and to build scale. (source)
Hussain said if both could not trade among themselves, then they were not doing it right.
"If we are to challenge the conventional banks' entrenched position in international financial deals, we must develop the capacity to structure multi-currency and cross-border transactions and to build scale. (source)
"To do that we need to build deeper relationships between key markets and between banks, so that we are better placed to compete on a global scale," he said yesterday.
He said the advantages of conventional banks over Islamic banks were that they had the right products; could undertake cross-border businesses because they had good network; and, had the scale and size.
"These are the three things we should focus on. Time is not an issue but you need to launch the initiative.
"We need to have more cross-border deals and size. If we don't do these we cannot compete with conventional banks, we can only be domestic or regional banks," he said.
Hussain said in doing this, bankers and practitioners needed to lead the industry and not wait for the government and regulators.
He said Islamic banking has progressed to a sufficient degree but needed to simplify product's names and iron out differences in syariah-compliant interpretations.
Hussain proposed the establishment of a joint Malaysia-UAE Syariah Board, comprising syariah scholars from both countries.
The board would be mandated with finding common grounds between the two schools of thought with the aim of developing new products and services, he said.
Citing an innovative sukuk launched by Cagamas, Malaysia's national mortgage company as an example, Hussain said, the offerings that were acceptable to investors in both Southeast Asia and the Middle East could be created.
He said the high level of infrastructure spending in both Asean and the Middle East offered Islamic finance an opportunity to establish itself in the global financial market, especially with the eurozone crisis that certainly depressed the European banks' appetite for financing infrastructure projects.
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