KUALA LUMPUR: There is no need to rebrand Islamic finance as of now as its products and services have been widely accepted by the majority of non-Muslim countries as well as companies, Bank Negara governor Zeti Akhtar Aziz said today.
She said Malaysia’s Islamic finance, for example, saw more than 50% participation of non-Muslims while in local sukuk market, more foreign companies from non-Muslim countries are issuing sukuk.
“The first one ever to issue sukuk in Malaysia is Shell Corporation and that is an international firm and from a non-Muslim country and then of course… others like Tesco, Nomura and Toyota followed suit.
“So this is tremendously encouraging for us and when asked whether we should rebrand it, the answer is no,” she told reporters at a special briefing which lasted for an hour, on the sidelines of the third day of Global Islamic Finance Forum, here today.
Citing her experience during a G7 meeting a couple of years ago, Zeti said the issue of rebranding was due to some thinking that Islamic finance may be a conduit for terrorist financing.
“The G7 invited me to talk about the similarities and differences between conventional and Islamic finance and I explained,” she said.
During the G7 meeting, Zeti explained that Islamic finance requires an underlying economic transaction, which is also based on profit sharing and when there is profit sharing, there’s a contract and imposed risk sharing.
“This risk sharing requires a high level of disclosure of information on the financial transaction, therefore the level of transparency is greater.
“Because of its very nature, the principle and features of Islamic finance, it was less vulnerable to terrorist financing compared to conventional financing,” she added.
Zeti also said greater dissemination of information on the features of Islamic finance, coupled with the introduction of prudential and accounting standards several years ago, showed that Islamic finance is really a form of financial intermediation that serves the real economy.