Islamic banking continues growth in Malaysia

Accounts for a fifth of Malaysia’s total banking assets.

The Ministry of Finance reported that the Islamic banking business in Malaysia expand in the first seven months of 2012 with total assets increasing 21% to US$154 billion, or 24.1% of the country’s banking system’s assets.

In 2011, it expanded by 24% to US$143 billion or 23.7% of total banking system assets.

RHB Islamic Bank Bhd Managing Director Abdul Rani Lebai Jaafar said Islamic finance in Malaysia is ready to move on to the next stage and compete more aggressively in the global financial market.

He believes Islamic finance appears to be equally accepted by both Muslims and non-Muslims due to continuous awareness programs and customer experience.

He noted that 2013 could be a challenging year as the issue of funding versus financing needs to be addressed. This problem has to do with sourcing funds to generate financing from very limited local resources.

Among the challenges facing Islamic financing is the limited number of trained and knowledgeable Islamic bankers to cater to the growing market.