Internationally recognised as the largest and most significant gathering of Islamic banking and finance leaders was held at the Ritz Carlton.
While delivering the keynote speech titled “Opportunities and Challenges for Shari’ah Compliant Islamic Finance,” Seetharaman, CEO Doha Bank said: “Harmonisation of standards in the legal and regulatory framework is the need of the hour. With the complexities of the Capital Market and the various instruments on offer or to be offered, an international Islamic authoritative body is required to define and provide guidance on what is permissible and what is not permissible under Islamic Law.”
Seetharaman, enumerated various other challenges facing Islamic Finance, namely, the need to build adequate infrastructure to enable the system to operate and function efficiently and effectively as well as the need to relax non-supervisory restrictions on access by foreign intermediaries to domestic markets.
He also highlighting the fact that the Islamic finance industry is expected to more than quadruple in value within a decade from its current size of between $800bn and $1 trillion, as it captures the savings of half of the world’s 1.6 billion Muslims.
The industry, which offers Shariah-compliant financial services, is expected to grow 15-20 percent annually to more than $4 trillion in invested funds in about 8-10 years.
Probing deep into the developments and opportunities in Islamic Banking, Seetharaman said that the market for Islamic sukuk is set to revive in six months with sovereign and corporate issuers raising at least $10bn in 2009, whereas issuances of sukuk, the Islamic alternative to conventional bonds, would fall from about $15bn last year but still demonstrate strong growth potential. On the other hand, he assured that
Islamic private equity players can tap the infrastructure through Islamic private equity funds covering infrastructure and property.
In his speech, Seetharaman explained that Islamic banking also offers great potential for Project Finance as the total value of the projects planned or under development in the Gulf region is more than $1 trillion.
They are mostly in the oil and gas, construction, power, petrochemicals and water and waste sectors, out of which about $600bn is planned for until 2010. And with a projected spend of $100bn on investment and infrastructure projects by 2012, Qatar is leading the way in the region’s project finance transactions growth.
He also demonstrated that the GCC’s asset management sector is set to grow 15 percent per year to up to $300bn by 2014 as investors seek new avenues for investing their money through tapping Islamic asset management opportunities in the GCC.
It is fact now that Islamic Banking has started to attract more attention from conventional bankers as a source of sustainable and ethical financing. This conference served as a platform for Islamic banking experts and practitioners to discuss the challenges faced by Islamic banks in sustaining comparative advantage in the respective markets of their operations.
If one thing has been confirmed by the financial crisis, Seetharaman asserted, it is that Islamic Banking provides a more viable alternative to conventional banking and is less cycle-prone.
The spread and success of Islamic Finance into western markets demonstrates that it is now being treated seriously by regulators and finance ministries.
The industry leaders felt that the conference has come at a time when it is needed most. They acknowledged that the conference will help seize this perfect opportunity and enable practitioners to discuss solutions for the obstacles that come in its way.
The collapse of leading Wall Street institutions, notably Lehman Brothers, and the subsequent global financial crisis and economic recession, are encouraging economists world-wide to consider alternative financial solutions.
Link: http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News&subsection=Local+Business&month=November2009&file=Business_News2009110435310.xml
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