As the World Turns ...

Salams, just wanna share some latest information on Islamic Finance. Credit to Islamic Finance News for this info. This is the real and crucial situation of IF now.

Promoters of Islamic finance love to trot out the figures. It is the fastest growing segment in the global financial industry. The size of assets under management may very well exceed US$1 trillion. It has maintained an average growth rate of 15 a year. New areas of business continue to show encouraging progress. Islamic mutual funds are growing at an average of 23% a year, the Takaful industry at 13%. Giant banking and insurance groups are now very much interested in Islamic finance as a way to grow their business.

The promoters' contention: Islamic finance is no more peripheral to the conventional banking system but has grown from being a novelty to be a viable and attractive alternative to its conventional counterpart. One claim is that interest in Islamic finance is no longer limited to Muslim nations and Muslim communities. "The world realizes that the economic clout of 1.5 billion people is a market that cannot be ignored," says one practitioner.

But if that is so, how come the penetration rate among Muslims remains low, creating a perception that in some jurisdictions, more non-Muslims than Muslims are drawn to Islamic finance? For Islamic finance to truly become a financial force, it has to be entrenched within the community that practices the faith it is based upon. For this to happen, the promotion of Islamic finance would need to lay greater emphasis on the religious aspects of the financial system. However, such prominence on its religious foundation could undermine its true characteristic — that it is a functioning system for all people everywhere, with money being used in a very productive and ethical manner.

This is a dilemma that scholars and regulators need to seriously look into. Yes, the remarkable growth momentum of the industry is real, but it is still a tadpole in a pond. Some see this situation as an opportunity to bring forth the true face of Islam, of moderation, acceptance of people of other beliefs, of living in harmony by focusing on the common strands of all beliefs — a truly tall order in a world that is presently plagued by negativity, meanness, spite and, in several instances, baseless hatred.

An alternative outlook is that the increasing competition will overshadow these issues. The race will see the emergence of non-traditional players, bringing with them superior systems, management skills, established R&D and risk management systems with proven track record globally. There will be more innovative products, new concepts and new structures, as the new players bring with them new value proposition to attract or entice their customers.

Demand will grow for services related to Islamic finance in consultancy, accounting, trust, Shariah, legal advice and IT services. New Shariah concepts will emerge and this will require scholars to rethink some of the structures that had been well established. In addition, new demand for standardization and harmonization of Shariah standards would intensify as cross border transactions increases. This will also result in an increase in demand for financial products that can be sold between markets.

The world has never remained static; hence there will always be agility and the commitment to bring positive change to the Islamic financial system such that it remains competitive and relevant. Therein lies the hope for better circumstances.IFN Rapid

Some info above mentioned need to ponder based on what I've highlighted.