Islamic banking and finance is likely to continue growing in the Asia-Pacific region but the real test of its sustainability will be how the system reacts to a major financial crisis, a report said yesterday.
The industry is set to develop its own identity separate from conventional banking as new Islamic financial products are rolled out, said the report by Financial Insights, a company under market research and analysis firm International Data Corp.
"The future for Islamic banking and finance in Asia looks bright and continued support by government authorities should ensure this future is grounded in strong, sensible regulation," said Abhishek Kumar, an analyst at Financial Insights.
He noted, however, that the industry's growth in recent years has occurred during a period of economic expansion, and there are concerns over how it would perform during a major financial crisis.
financial crisis
"How the system handles a major financial crisis or recession will be the true test of its sustainability," Kumar said.
Conventional banking systems in several Asian countries crumbled during a financial crisis in 1997, exposing the industry's weaknesses and excesses. They have since recovered.
Islamic financial assets under management are currently valued at more than US$400 billion worldwide, with the industry growing at double digits annually, the report said.
Islamic banking fuses principles of Shariah and modern banking. Islamic funds are banned from investing in companies associated with tobacco, alcohol or gambling considered taboo by Muslims.
As the industry matures, there is likely to be a shift from Islamic banking products that resemble conventional ones to completely new offers, helping it to develop its own unique identity, the report said.
complementary
"The ... industry has reached a point where, in some product areas, it can provide a credible alternative to traditional banking products," it said, adding that this will be complementary rather than competitive.
The report added that Islamic funds are attracting a large number of non-Muslim clients.
Malaysia has "effectively established itself as the regional, if not global, hub for Islamic finance," the report said.
Indonesia, Pakistan, Thailand and Singapore are also among the countries in Asia actively promoting Islamic finance, it said.
A magnitude 7.8 earthquake struck off the southern coast of Mindanao in the Philippines at 7:38am today, prompting the US Tsunami Warning System to issue an alert for neighboring countries, including Taiwan. The system issued a purple alert indicating a "tsunami threat." The potential threat zone includes Taiwan, the Philippines, Papua New Guinea, Yap and Palau. A spokesperson for Indonesia disaster mitigation agency said there were no reports of damage so far. Arlene Hollero, disaster chief of Maasim town in the Philippines' Sarangani Province, said their evacuation was underway in coastal villages and there were no reported casualties so far. DZBB radio, broadcasting from the
RESILIENCE: Taiwan plays a key role in semiconductors, energy, information infrastructure and advanced manufacturing, AIT Director Raymond Greene said Taiwan’s continued investment in deterrence and resilience remains vital, especially in uncrewed systems and other emerging technologies, American Institute in Taiwan (AIT) Director Raymond Greene said yesterday. Greene made the remarks at the annual National Strategic Summit on Supply Chain Resilience held by the Research Institute for Democracy, Society and Emerging Technology (DSET), a government-backed think tank. As Taiwan last year became the US’ fourth-largest trading partner and supply chain security is becoming more important, cooperation in emerging technologies continues to deepen between the two countries, he said. The US is committed to accelerating innovation, building key infrastructure, strengthening cooperation
The National Chungshan Institute of Science and Technology yesterday showcased its locally developed variants of the Vision 60 robotic patrol dog, which it plans to deploy on the nation’s outlying territories in the South China Sea. The variants were produced under the Joint Lab project — created by the institute and domestic companies — and assembled with domestically produced motors, lenses and artificial intelligence (AI) systems alongside licensed tech from the US, Missile and Rocket Systems Research Division deputy director Jen Kuo-kang (任國光) told the media event at a military base in Taipei’s Dazhi (大直) area. Taiwan has built up its strengths
RIGHT DIRECTION: Taiwan’s efforts to prevent forced labor include a proposal to ‘fully prohibit’ employers from withholding workers’ documents, an official said Taiwan is to establish a mechanism to restrict imports of goods linked to forced labor, the Executive Yuan said yesterday, after the US proposed imposing additional tariffs on Taiwanese goods over labor concerns. “The Ministry of Labor and the Ministry of Economic Affairs are to establish an interministerial review procedure,” Executive Yuan spokesperson Michelle Lee (李慧芝) said at a news briefing in Taipei. “The government is to use the Foreign Trade Act [貿易法] as the legal basis to restrict imports of goods produced with forced labor” and bring its supply chain governance more in line with international standards on human rights, resilience
RSS