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KUALA LUMPUR : Malaysia will ease its rules to allow all banks to do Islamic banking business in foreign currencies, the central bank said Tuesday.
Non-Islamic commercial banks and investment banks licensed by the government will now be allowed to do Islamic banking business as the country aims to position itself as a global hub for the sector, central bank chief Zeti Akhtar Aziz said in a statement.
"We want and aim to develop Malaysia into a centre for the origination, distribution and trading of sukuks (Islamic bonds) to provide further impetus to the development of an increasingly vibrant and progressive bond market in Malaysia as well as in the Asian region," Zeti said.
However, according to Islamic finance strict rules, interest payments and profits earned from alcohol, pornography, pork or gambling are still banned.
Muslim-dominated Malaysia has the world's largest Islamic bond market, accounting for about US$47 billion or two-thirds of total Islamic bonds outstanding worldwide.
Its Islamic finance industry is worth US$38 billion in assets ranging from stocks and insurance to home loans and pawn-broking. Islamic banking assets also make up over 12 percent of total bank assets, the central bank said. -AFP/ch
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