Mega Islamic Banks Will Position Malaysia Well in Global Islamic Finance

IPOH (Perak,Malaysia), June 25 (Bernama) -- The setting up of mega Islamic banks in Malaysia will not merely serve the needs of the domestic economy but also position the country as the benchmark in Islamic global finance, says Second Finance Minister Ahmad Husni Hanadzlah. It would also place Malaysia far ahead of other competing countries, he said. "Bank Negara Malaysia has issued one license. Why is there such a need...we need to see in the context of the country's economy. Under the National Key Economic Areas, financial services is among the economic growth sectors and it is also an area where we are competing with other countries," he told reporters after officiating the opening of Mydin's 100th chainstore and its 10th hypermarket at Gugusan Manjoi here on Sunday. Todate, Malaysian Central Bank (BNM) has not made any announcement on the receipient of the license. Last March, the central bank expected two entities that were given temporary licenses to set up mega Islamic banks, to make the announcements on their investment plans. BNM Governor, Dr Zeti Akhtar Aziz said the central bank had given them more time to announce their plans considering the current challenging environment and the high investment cost involved. On the 84 memoranda (received by the ministry) where requests have been made for, among others, a reduction in taxes and an increase in the number of affordable homes in the 2013 Budget, Ahmad Husni said his ministry has already started discussions with the main target groups. "We have 16 more target groups where the process will continue up till July. We have two stages with the first involving studying the contents of a memorandum and on what is being requested and at the same time continuing with the target groups for input." Sometimes a memorandum may look at an aspect in a general way and more details can be garnered by engaging the target groups, he said. On the call for reduction in taxes, he said it would have to be studied in whole and in consideration of the country's finances. "In terms of the country's finance, it must be understood that we are managing a fiscal position where the aim is to reduce the deficit, debts, and at the same time putting aside the allocation for development purpose. This is the balancing we need to do," he said. Ahmad Husni said tax reduction was not something that could be simply implemented as it depended on the country's income and expenditure. He said the government expected to reduce deficit to 4.7 per cent this year compared with 4.8 per cent last year, and also aimed to bring it down to three per cent in 2015. --BERNAMA