| Achong Tanjong |
BRUNEI was ranked among top 10 in the Islamic finance performance, according to the ICD-Thomson Reuters Islamic Finance Development Report 2017.
This was highlighted by Professor Dato Dr Mohd Azmi Omar, President/CEO of International Centre for Education in Islamic Finance (INCEIF) Malaysia in his keynote address at the Brunei Islamic Banking and Finance Forum (BIBFF) 2018 themed ‘25 Years of Islamic Banking and Finance in Brunei’.
The event was hosted by the Islamic Finance and Halal Marketing (IFHM) research cluster under the Universiti Brunei Darussalam School of Business and Economics (UBDSBE) yesterday at the Senate Room, Chancellor Hall, UBD.
Professor Dato Dr Mohd Azmi who was also the keynote speaker said the Islamic Finance Asset went from US$1.7 trillion in 2012 to US$2.2 trillion in 2016.
This growth is projected to further expand to US$3.7 trillion in 2022.
From the available data in 2016, these assets can be further broken down into several asset classes, where the majority is from the Islamic Banking industry at 73 per cent, followed by Sukuk at 16 per cent, other Islamic Financial Institutions six per cent, Islamic funds four per cent and Takaful two per cent.
In the field of knowledge in 2016, it is observed that about 2,581 research papers were published in of Islamic finance while there are 683 Islamic Finance education providers.
The Brunei Financial Sector blueprint has targetted the sector’s contribution to GDP from 5.1 per cent (2016) to eight per cent (2035).
In comparison, Singapore’s targets were 12.8 per cent (2016) and 13.3 per cent (2017).
The country may want to further explore its challenges and build up on its strength to be the International digital hub for Islamic finance and Halal economy. This is expected to develop among others the Islamic banking industry, Islamic Capital market, Takaful, Islamic wealth management, Islamic crowdfunding and human capital development.
He also stressed the importance of human capital in ensuring Islamic finance in a Halal economy.
From an academic viewpoint, he emphasised the need for curriculum programmes to focus not only on current skills needed but to also cater future needs requirement, given the rapid changes brought about by the fourth industrial revolution in the global Halal space.
Meanwhile, Professor Ahmed Masood Khalid, Dean of UBDSBE in his welcoming address said the forum aimed to provide a platform to researchers, regulators, academics and practitioners to discuss the challenges Islamic finance industry is facing today.
It was also to deliberate potential measures and policies in strengthening the industry in the future.
“As students of finance, we know the three important ingredients of a successful financial sector which are the markets, the products and the participants,” he said.
“However, to provide stability and growth to the financial industry there is a need for financial regulations and corporate governance. In the case of Islamic banking and finance, these policies and procedures are even more important to ensure the products and processes are Syariah-compliant,” Professor Ahmed Masood said.
He added that Syariah-compliant banking products hold a 40 per cent market share.
One study projects that by 2020, the market share of Islamic banking and finance in the Sultanate will grow to at least 50 per cent of the total financial sector.
Besides Islamic banking, growth is also noticed in Islamic products including Takaful (Islamic insurance) where the market share is estimated around 40 per cent. Retail Islamic banking products and services currently available in the Brunei market include the Bank Islam Brunei Darussalam (BIBD) Home Financing Product and BIBD Financing Product using the Tawarruq concept. On the regulatory framework, Brunei introduced some legislation such as the Syariah Financial Supervisory Board Order 2006, the Islamic Banking Order 2008 and the 2008 Takaful Order.
The one-day forum featured 12 speakers from government agencies and private organisations which included Autoriti Monetari Brunei Darussalam, Bank Usahawan Brunei, BIBD, SBI Islamic Fund (Brunei) Limited and Perbadanan Tabung Amanah Islam Brunei, as well as academia from Universiti Brunei Darussalam and Universiti Islam Sultan Sharif Ali (UNISSA) who provided insights on the developments of Islamic banking and finance in Brunei.
The forum facilitated by the Islamic Finance and Halal Marketing under the UBDSBE was aimed at promoting research, development and publication activities in the field of Islamic finance. The opening ceremony yesterday was officiated by the Assistant Vice Chancellor (Academic Affairs) of UBD, Associate Professor Dr Mohammad Ayub Sadiq @ Lin Naing.