Islamic finance set to be a $2 trillion global industry

DUBAI — Islamic finance is set to be a $2 trillion worldwide industry in the next five years, according to Rushdi Siddiqui, Global Head of Islamic finance of Thomson Reuters.

  • Follow us on
  • google-news
  • whatsapp
  • telegram

Published: Wed 26 May 2010, 11:19 PM

Last updated: Mon 6 Apr 2015, 11:12 AM

Speaking at a panel discussion at the Middle East, North Africa and South Africa Forum, or MENASA, entitled “The Challenges Ahead for Islamic finance,” Siddiqui said: “It took the Islamic finance industry 40 years to become a $1 trillion industry. It will take another two to five years to become a $2 trillion industry.”

However, there are many challenges that need to be overcome for the industry to realise its potential. Panellists said the lack of standardisation in the industry, the lack of consensus among Shariah scholars, the a poor “connectivity” between Islamic finance institutions across the world, and the global shortage of experienced Islamic finance professionals are some of the challenges facing the industry.

Apart from Siddiqui, panelists who participated in the discussion included SABIC Executive Vice-President of Corporate Finance Mutlaq H. Al Morished and Barclays Capital and Barclays Head of Islamic Finance Wealth Harris Irfan. The session was moderated by Standard Chartered Saadiq CEO Afaq Khan.

Talking about the lack of standardisation and diversity of Shariah interpretation in the industry, Irfan said it was becoming less of a challenge with the increasing convergence of standards.

“I am 100 per cent convinced that we are seeing the convergence of opinion in Islamic finance across countries, scholars and schools of thought.”

Khan said that as with any fast-growing industry, Islamic finance also faces many challenges as the industry and its stakeholders try to keep pace with developments in human capital, access to Shariah guidance from scholars, changes in regulations aimed at allowing Islamic finance to grow side by side with conventional finance and risk management both for Islamic finance institutions and Islamic customers.

Talking further about the importance of strengthening risk management, he said that as the industry grows and offers a broader suite of products to its clients in home markets or in new geographies, it is exposed to new risks that must be proactively managed. Islamic banks now form a significant part of the financial market in several countries and therefore have a responsibility to manage the risk prudently so as not to disrupt the market as a whole, he added.

business@khaleejtimes.com



More news from