ThE local Islamic banking and finance industry is expected to make up half of the total financial sector in six years time, a senior official from the country’s central bank said yesterday.
In his speech during the 10th Annual Brunei Darussalam Round-table 2014, YB Pehin Orang Kaya Indera Pahlawan Dato Seri Setia Hj Suyoi Hj Osman, deputy chairman of the Autoriti Monetari Brunei Darussalam (AMBD) and Minister of Development, said that the mar-ket share for Islamic finance in Brunei will grow to at least 50 per cent of the local financial sector by 2020, quoting a study by Islamic Financial News.
“Islamic banking has been growing alongside the takaful (Islamic insurance) industry with market shares of 47 and 32 per cent as of second quarter 2014, respectively,” he said in his speech at the Empire Hotel & Country Club.
In order to develop the industry further, he said that opportunities in other parts of Islamic finance particularly in capital markets, need to be looked out for.
“The biggest areas of potential are capital markets and insurance industries, whereby currently their combined market share in terms of asset size is about six per cent of the financial services sector,” he said.
He also said that the financial services sectors is identified as one of the key economic drivers for Wawasan Brunei 2035 and should increase its contribution to the national gross domestic product (GDP). “We would like to see its contribution to GDP climb to eight per cent from 2.8 per cent in 2008,” he said.
He said that the Islamic finance industry is a niche that Brunei can leverage by tapping into the global Islamic industry which is currently worth about US$1.8 trillion in terms of assets.
Islamic finance has proved to be resilient during the financial crisis and continues to be an attractive market segment, he said.
He then highlighted the importance for AMBD to implement “smart” regulatory frameworks to ensure that markets remain stable and to work together with stakeholders in the industry.
He also said that it is vital to build human capacity in order to support and sustain the industry.
“There must be emphasis put on human capital development and talent mobility, both of which will benefit the industry through better productivity and creation of high-value products,” he said.
In terms of awareness, he said that financial literacy among Bruneians is key to achieving the national vision. By being financially literate, we are able to make informed decisions about finance and investments, he said, adding that the Centre for Islamic Bank-ing, Finance and Management plays the role of training for industry players.
The event which was themed “A Decade of Progress and Growth: The Roadmap Ahead“, saw the gathering of financial regulators and industry players with discussion centred on the current investment trends, development of capital markets and the human capacity needed to grow the financial industry.
Source: The Brunei Times