The last and final day of JEF 2011 included a prolific discussion on Islamic banking and finance with Sheikh Saleh Kamel, as a keynote speaker. Governor of SAGIA HE Amr Al Dabbagh shed light on what Saudi's Investment plans for the next 5 years.
The Chairman of the Jeddah Chamber of Commerce and Industry, Sheikh Saleh addressed the audience during the opening session and called for the unification of Fatwa Authorities at banks. He highlighted the importance of a managing entity to ensure that Islamic transactions are viably controlled and stressed need for proper understanding of its true meaning for proper application of Islamic Finance.
Islamic finance has gone global, not just in Islamic countries. Abdulkarim Abu Al Nasr, CEO National Commercial Bank, stated that the Islamic industry worldwide exceeded US$ 1 trillion and is expected to grow up to US$ 4 trillion USD by 2020. Islamic insurance alone is expected to reach 25Billion USD by 2015.
Following the global financial crisis, Islamic finance has gained popularity. Mutlaq Al Morshed, VP of corporate finance, SABIC added: "We also suffered during the economic crisis. We are different but not isolated from the world, we cannot isolate ourselves and this is the truth."
Humayan Dar, Managing Director, BMB highlighted that currently 75% of Muslims worldwide are convinced that they should not be involved in Islamic finance and this due to a lack of understanding. From a global perspective, the large majority of the populations do not understand what Islamic finance is.
Sheikh Saleh stated that the General Council of Islamic Banks is striving to put the industry on the right track, and that he looks forward to the establishment of Al-Kabeer Islamic Bank by end of 2011.
All speakers discussing the future of Islamic Finance unanimously agreed that Islamic finance is growing but needs a regulatory authority to ensure that as it grows it still abides by true Shariah Laws.
Abdullah Al Rajhi, CEO, Al Rajhi Bank, named the Islamic Services Council in Malaysia as an international reference point for safer Islamic Monetary guidelines, regulation and supervision over Islamic financial institutions.
Morshed recommended for Islamic finance to flourish on solid ground and banks need to work on creating secondary market to foster liquidity in the market. He also urged to gain knowledge from various information portals and warned not to directly rely on Shariah experts.
Al Morshed pointed out that Islamic Finance needs to come up with innovative ideas such as the CDS (Credit Derivatives) that were launched JP Morgan launched recently.
"The only way to stand up to global standards is to set local standards. The legal framework needs to be standardized" he added. He concluded by referring to need for experts of Islamic Finance who understand the two worlds of Shariah and Finance. "There are a lot of Shariah scholars and a lot offinancial scholars but the connection between the two is lacking however is being pursued and requires time to be fully witnessed" he added.
Moving on to Saudi Arabia's investment outlook, HE Amr Al Dabbagh explained that the Kingdom has made a great deal of progress in economic diversification, educational reform, etc however, he remarked that this is just a drop in the sea to what is going on in the world.
Article from Global Islamic Finance Magazine
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