Saturday 25th Oct 2014
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MALAYSIA LIBERALISING ITS ISLAMIC FINANCE SYSTEM

Muslim World

The Islamic financial system in Malaysia operates in parallel with the conventional banking system, servicing both the Muslim and non-Muslim communities. Pointing this out, the Raja Muda of Perak, Raja Dr Nazrin Shah said the shariah principles which underline Islamic finance have contributed towards its stability and resilience in facing issues such as the current global financial turmoil. "Therefore, it comes as no surprise that during the current global financial turmoil, Islamic funds have seen less volatility and risk, and as a result have performed better compared with conventional funds," he said Raja Dr Nazrin also cited shariah injunctions like those prohibiting excessive leverage and speculative financial activities as having insulated Islamic funds from too much risk exposure, thus limiting their exposure to the meltdown of the financial system in the United States and Europe. Raja Dr Nazrin said Malaysia believed there was tremendous upside potential for Islamic finance and that the current financial turmoil provides an opportunity for Islamic finance to position itself as a complementary, if not alternative, to conventional finance by providing investors with other asset classes and markets that provide stability.



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