Thursday, October 30, 2014
Islamic Finance grows faster than Conventional Banking
MUSCAT — “Islamic finance is growing at twice the rate of the traditional banking industry in its core markets, which include Malaysia, Indonesia, Turkey and the GCC countries. The industry currently boasts $1.6 trillion in banking system assets,” said Mohammed Mahfoodh Al Ardhi, Chairman of the National Bank of Oman.
He added: “The GCC countries have committed to actively strengthening their positions in the Islamic finance market, with Saudi Arabia currently in the lead. We, at the National Bank of Oman, have been doing significant work in the Islamic finance domain and achieved considerable success as part of the broader plans to diversify Oman’s economy. Bahrain and Dubai are also emerging as notable offshore centers.”
Al Ardhi’s comments were made during a speech and interactive session at London Business School, where he shared his expertise with the faculty, students and alumni.
Highlighting the practical implications of Islamic finance, current industry scenario, as well as opportunities, challenges and criticisms the sector faces, Al Ardhi drew out the distinctions between conventional and Islamic economic models.
“Islamic finance is based upon the fact that money is not a source of potential capital or a commodity in itself but rather a medium, a facilitator, for trade and investment. Islamic finance is consequently built around the principles of risk sharing and shared investment, outlawing speculative activity and behaviors while discouraging debt to ensure the sanctity of contractual undertakings,” he explained.
He elaborated that the Islamic finance system is emerging as the more prudent, non-risky and ethical alternative to its conventional counterpart.
Professor Sir Andrew Likierman, Dean, London Business School, said: "London Business School, through its Executive MBA in Dubai and its close links with leading companies in Oman, Qatar, Kuwait and Saudi Arabia is committed to working with organizations in partnership to ensure world class leadership and enhance the prosperity of the region. We are delighted that our links with the National Bank of Oman are so strong and appreciate Mr Al Ardhi coming to London to talk to our students here." — SG