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Islamic banking extends beyond the Middle East
In 1975 there was only one; today there are more than 300 Islamic banks in over 75 countries according to Dr. Linda Eagle of the Edcomm Group Banker's Academy in New York.
January 9, 2011 2:02 by Samuel Potter
The Islamic finance industry has started to gain major momentum outside of the Middle East. As more financial institutions begin to introduce Sharia-compliant banking products and services, the growth of this market segment provides a new opportunity for financial institutions located in the Middle East to export their business outside of the region to serve the more than 1 billion Muslims living worldwide.
For instance, just a couple of months ago, the Central Bank of Malaysia announced that before the end of 2010 it would issue a license to a new Islamic bank, jointly established by institutions from the Middle East and Asia. Currently, Malaysia is responsible for more than 60 percent of the world’s $130 billion outstanding Islamic bonds, allowing the new bank the ability to facilitate the larger issuance of such notes. Additionally, Malaysia has shown an increased interest in Islamic finance and has taken significant actions to help make it more widely available throughout the country through international road shows, training programs aimed at regulatory bodies (such as the Islamic Markets Program organized by the Securities Industry Development Corporation), and public engagements.
Even amidst the global financial crisis, Islamic banking has remained steady and largely unshaken by the economy primarily due to its more cautious attitude towards money. Instead of using financial instruments as derivatives, Sharia law bans insurance and investment gains, as well as excessive risk-taking and trading in debt. Islamic banks also do not collect late payment fees. Therefore, when the economy suffers, individuals are protected from losing out as well. The resilience of the Islamic banking market in spite of the global crisis has encouraged more countries to use Islamic principles to help run their economies.
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