Islamic Finance Should Be Transparent To Ensure Predictabiltiy, Says Raja Nazrin

KUALA LUMPUR, March 16 -- Islamic finance should be transparent as possible as it ensures predictability and confidence in the processes.

"While there may inevitably be some element of complexity when devising management products, it was important that there is clear and direct relations between products and the underlying assets.

"We must ensure that we are inclusive. Engagement of stake holders especially consumers and financial institutions are the keys to unlocking the potential within Islamic finance," said the Raja Muda of Perak, Raja Dr Nazrin Shah here Tuesday.

In his keynote address presented at the forum on "Contribution of Islamic Finance Post Global Financial Crisis", Raja Nazrin said there should be a high level of innovation in Islamic finance as opposed to limitations.

The one-day forum, organised by the Securities Commission and the Oxford Centre For Islamic Studies, provides an international platform for debate, dialogue and study on contemporary issues and challenges faced in bringing Islamic finance to the mainstream.

He also said merely lecturing the world on the merits of Islamic finance was not sufficient to make it competitive and attractive but there should be strategic and complimentary approaches.

"For all its successors, Islamic finance still accounts for less than one per cent of global financial instrument.

"Muslims make up over 20 per cent of the world's population, but even in Muslim majority countries the assets of conventional banks far outstrip those of Islamic ones.

"It will take careful and astute initiative before Islamic finance can begin to actually make such a contribution," said Raja Nazrin.