Malaysia tops international Islamic finance index

Adoption of new framework instrumental in rise in rankings, says chief regulator

Malaysia tops international Islamic finance index

Insurance News

By Gabriel Olano

Malaysia has retained the top spot in the 2021 Islamic Finance Development Indicator (IFDI) by Refinitiv. Neighbouring Indonesia came in at second place, which it also held last year.

Saudi Arabia, Bahrain and the UAE rounded out the top five.

According to Refitiniv, the ninth and latest edition of its IFDI examined key financial metrics for 135 countries. These metrics played a significant role in shaping the financial environment during the pandemic year of 2020.

The report revealed that global assets for the Islamic finance industry maintained double-digit growth, rising 14% to US$3.37 trillion (SG$4.58 trillion) in 2020. Malaysia ranked first in the indicators for knowledge, quantitative development, governance and awareness.

Bank Negara Malaysia governor Datuk Nor Shamsiah Mohd Yunus said the Malaysian industry’s growth was boosted by the adoption of the value-based intermediation (VBI) framework by Malaysian Islamic banks in 2017 and by takaful operators in June.

“The encouraging progress of VBI implementation by Islamic financial institutions (IFIs) underscores their commitment for positive value creation in financial intermediation,” Nor Shamsiah told Malay Mail. “We envision the IFIs to build on this experience and further lead sustainability initiatives within the financial sector. This, in turn, will further sharpen IFIs’ edge to capitalise on the growing opportunities on this front.”

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