KUALA LUMPUR, May 18 — Empowered by the principle of Islamic finance, banks that hinge on Islam and Shariah method, are very far-sighted in preparing for various high-risk situations, such as Covid-19, and ensuring that they are effective, the Chartered Institute of Islamic Finance Professionals (CIIF) said.
It said the analysis released by credit rating agency Fitch Ratings recently further reinforces the fact that Islamic banking has been prepared to face various economic crises.
This is further strengthened by the element of flexibility of the Islamic banking sector compared to that of conventional banking, it added.
“At CIIF, we see this situation as an opportunity to develop the long-term potential of the Islamic banking industry and a great prospect for Malaysia to contribute new highly-skilled talents in this field,” CIIF chief executive officer Dr Azura Othman said in a statement today.
Dr Azura said Islamic banking emphasises on several important elements such as high industry standards, sophistication of knowledge, and quality of service with high integrity.
As such, she said it is the responsibility of the relevant parties to prepare and supply new industry talents with appropriate accreditation and skills to ensure the future progress of the industry.
“This can be realised with various programmes provided by CIIF, which was established to strengthen the credibility and enhance the status of professional experts in the field of Islamic finance in Malaysia.
“CIIF believes that Malaysia has a great ability to hone new talents in the Islamic finance industry not only to meet the needs of the current market but also to further strengthen the country’s position as one of the leading suppliers of high quality professionals in the industry,” she said.
Fitch Ratings has expressed confidence that some sectors, including Islamic banking, in the country’s economy will continue to grow despite the challenges of Covid-19.
Dr Azura said the main factor in the resilience of the Islamic banking sector is based on the principles of Islamic finance itself, namely risk and reward sharing.
“The logic behind this principle is profit and loss is shared between the bank and its customers, based on physical assets compared to interest-based loans where the borrower bears the risk.
“This method is derived from the principles of Islam which emphasises and upholds social justice in which a loan is considered as a deed of worship, hence, the act of profiting from a loan is prohibited.
“In addition, the teachings of Islam strongly encourage the principle of equity in any transaction,” she said. — Bernama
