Mapping Malaysia's Resource Centres

11 Islamic Finance and Advisory The Islamic Finance marketplace in Malaysia comprises a diverse range of entities and bodies. At the national level, there are government ministries and agencies, as well as regulators; while Islamic banks, takaful operators, re-takaful operators, Islamic asset and fund managers, and Islamic capital market intermediaries represent industry players. This ecosystem also comprises talent development institutions and professional ancillary services companies. What underlies this system are robust regulatory, supervisory, Shariah and legal frameworks; a deep primary market, active secondary sukuk (Islamic financial certificates) market; and diverse players with global capabilities and connectivity for business anywhere in the world. Financial institutions and professional ancillary services providers in Malaysia are instrumental in facilitating the growth of the industry beyond national borders. Human capital development is also a focal point in the industry. Various providers offer academic courses (public and private education institutions), training programmes and certification programmes in Islamic finance. The Islamic financial system has become an integral component of the overall financial system in Malaysia. The Islamic banking industry commands 36.6% of total banking assets, while takaful industry stands at 16.3% of total net contribution. In addition to that, the volume of annual Islamic interbank transactions reached over RM4 trillion. The Islamic capital market represents 61% of Malaysia’s overall capital market. Globally, the country continues to be at the forefront with 48.8% market share of total global sukuk outstanding and 33.8% of global Islamic assets under management. In recent years, Malaysia has spearheaded a number of innovative developments, aimed to spur the vibrancy of this thriving industry. Islamic financial institutions are creating greater differentiation in its financial services solutions by focusing on generating positive and sustainable outcomes, as well as integrating social finance and risk sharing instruments through the use of technology. Malaysia is globally recognised for its comprehensive ecosystem. This reflects its leading position in the Islamic Finance Development Indicator (IFDI) for six consecutive years. Its Islamic financial stakeholders have significantly supported the advancement of the Islamic finance industry either in advanced or new Islamic finance markets.