By Santhosh V Perumal
Business Reporter
Islamic finance, with estimated assets of $1.8tn, should expand into Asia and the Middle East in a bigger way and explore ways of enhancing the investment universe for demand stability as well as diversify and mitigate risks, according to Qatar Central Bank (QCB).
“Islamic finance needs to expand and move into Asia and the Middle East,” QCB HE governor Sheikh Abdullah bin Saoud al-Thani told the International Institute of Finance (IIF) Spring Membership meeting that concluded in Doha yesterday.
“It will benefit greatly from London which has become a hub for the Islamic finance,” Sheikh Abdullah said.
The development of Islamic finance industry over the years would need further refinement and growth without losing its essence but this was a challenge from a purely economic perspective, he said.
Finding that demographics is still working in the favour of Islamic finance, he said that the sector had to become more creative and provide an alternative source of funding for the infrastructure needed to achieve sustainable economic development.
“We need to diversify Islamic finance,” he said, adding feasibility studies should be made on Islamic equity funds.
He said the potential growth for the Islamic finance worldwide required a legislative framework that would maintain global financial stability.
Sheikh Abdullah said QCB was keen to promote Islamic banks in Qatar, which now has four such lenders - Qatar Islamic Bank, International Islamic, Masraf Al Rayan and Barwa Bank - which together account for 25% of the country’s banking assets.