Hargeisa, 27 June 2009 (Somalilandcurrent) – Governments trying to set framework for establishing Islamic Banking. Conventional banks trying to extend their line of service by Islamic Banking. And Islamic banks are expanding their network globally. Islamic Banking is on the rise! But despite that impressive growth standards have to be set in order to not dilute the quality of Islamic Banking.
Recently there is a lot of talk about Islamic Banking as it seems to have proofed more resilient than conventional banking.
However the total number of Islamic banks is still small and according to online-researches conducted by Shariah-Fortune estimated at around 350-400 institutions worldwide. Compared to around 9,500 banks located in the USA the Islamic Banking sector still seems pretty small.
But its relativity small numbers bear potential for extraordinary growth rates. According to estimates Islamic Banking is one of the world’s fasted growing financial sectors, rising 15-20 % p.a. Asian Banker Research Group found out that growth rate is as high as 26.7 % among the 100 largest Islamic banks.
Basically Islamic Banking is not only restricted to about 1.5 bn Muslims; indeed even non-Muslims can profit from the advantages of Shariah-compliant banking. Most of the banks offer their services to non-Muslims as well.
Islamic banks are located in 50 countries worldwide and can be found in countries like Algeria, Azerbaijan,…Yemen. Major Islamic Banking hubs are Malaysia, Bahrain, UK and UAE.
With regards to the above mentioned many countries and banks now trying to establish or expand Shariah-compliant banking.
A recent example is the mainly Muslim nation of Kazakhstan in which 3-4 Islamic banks are planning to set up operations soon. Special attention should be paid to China. The China Banking Regulatory Commission had given approval to a pilot project of Bank of Ningxia to undertake Islamic financial services in the People’s Republic of China. Even African countries like Nigeria or Senegal trying now to expand their Islamic Finance systems. In March 2009, a framework for non-interest banking was released by the Central Bank of Nigeria. More examples could be named.
However many of these countries are not yet ready to offer Shariah-compliant banking services as they either lack human resources, expertise or the economical and political framework to do so. According to Dr. Al Jarhi, President of the International Association for Islamic Economics, ‘…one of the most serious challenges is represented in the need for set standards and criteria for the governance of Shariah boards at Islamic banks’.
Shariah-Fortune is a service provider in the Islamic Finance Intelligence. It provides informational content with regards to Islamic banking & financing, insurance/takaful, real estate, investment, asset and wealth management and other services related to Islamic finance. Shariah-Fortune provides the world´s biggest company online directory for Islamic Finance with more than 800 institutions in 50 countries worldwide. It covers nearly every geographic region and segment in the Shariah compliant products industry, sourced from the internet through a substantial secondary research effort coupled with a high quality data cleansing process.
Periodically Shariah-Fortune issues a free market report about the size, market players and development of the Islamic Finance sector.
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