Islamic banking is undergoing exceptional growth year after year and has surpassed conventional banking with phenomenal figures. As per RNCOS report, Gulf War stirred the Islamic finance market.
A phenomenal growth has been witnessed in the Islamic banking sector as assets under management are expected to reach in excess of one trillion dollar by 2010, as per World Islamic Banking Competitiveness report revealed in Bahrain at the 14th World Islamic Banking Conference, according to Gulf-daily-news.
Islamic banking is not only meant for Muslims alone. The essential variation between conventional and Islamic banking is that Islamic banking pays attention to establishing a savings-oriented society instead of just persuading people to spend.
Bahrain is thought of as the hub of Islamic banking all because of its widespread heritage and progressive move towards Islamic finance.
As per a research report “Middle East Banking Sector Analysis (2007-2011)” by RNCOS, the rate of expansion of Islamic banking industry in the subsequent years after when Bahrain Islamic Bank was established was comparatively slow. By the year 1994, there’re only five Islamic investment banks and just single offshore banking unit. The motive of invigorating the Islamic finance market was during Gulf War that surged revenues and oil prices, thus escalating the demand for the Islamic customized investments.
Industry experts said that the expansion of Islamic banking, which surpasses conventional banking YOY, is all set to grow at a phenomenal rate into 2008 as leading new Islamic financial institutions commence their operations. Renowned players will get the opportunity to expand their global footprints and the conventional banks will further strengthen their Islamic product offerings.
Quite often, the macroeconomic fundamentals generate an encouraging view of the banking sector in potential Islamic finance markets along with increasing population and an immensely underpenetrated banking sector. The increasing interest in the Islamic finance is mirrored by a consequent growth in the volume of players, elevating the competitiveness limit in the market.
A major chunk of existing growth and market performance is stemming from business like corporate and retail banking. Three major areas, Islamic bonds of sukuks, Asian Islamic banking market and asset management, are responsible for a prominent growth.
Nevertheless, as per industry experts on the internal capabilities, there’re two significant areas that require to be kept in mind risk management, particularly precise risks faced by the Islamic banks due to their multiple product framework and processes. This also includes operations that drive competition and directly influence the quality of services and business expansion.
Related Market Research Reports:
Sharia Banking System in Indonesia
South African Banking Sector Analysis
Bulgaria Banking Sector Analysis
