Much had come into discussion on better regulation in the Islamic Finance Industry, including a call for a separate set of Islamic Finance regulation and reporting standard.
The central banks of Islamic countries are now being urged to adopt a separate set of regulation in order to avoid misleading Muslim scholars, Islamic Bankers as well as investors where deals on Islamic banking industries are concerned.
Speaking at the two-day Annual World Islamic Finance Conference, CEO of Mashreq Al Islami, Moinuddin Malim said that there should be an Islamic banking governance to ensure that Islamic banks do follow Islamic norms and there is also a specific need to fine-tune all of the regulations in order to create a base standard for the entire Islamic world.
Malim also stated that there is an obvious absence of benchmark rates in the Islamic finance industry which then forces Islamic banks to revert to benchmark interest rates in offering profit rates.
This is seen as one of the challenges in the Islamic finance markets on a global scale.
According to the CEO of the Dubai-based Dar Al Sharia, Suhail Zubairi, several scholars are trying to emulate the Islamic banking practice with that of the conventional banking, and this is considered dishonest.
He added that Islamic finance is ethical finance, therefore it has to completely separate from conventional banking system.
Based on Ernst & Young’s World Islamic Banking Competitiveness Report 2013, the Global Islamic Banking asset will amount to $1.8 trillion.
The prediction is substantially higher than earlier estimates in the industry.