Bahrain has been named the GCC’s leading Islamic finance market and second out of 92 countries globally, according to the ICD-Thomson Reuters Islamic Finance Development Indicator (IFDI).
As well as being highly ranked in terms of its commitment to research and training and local awareness of the industry, Bahrain was also ranked as having the best governance in Islamic finance in the world, with the report praising the regulatory framework covering all sectors, and high levels of disclosure.
Bahrain is home to the largest concentration of Islamic financial institutions in the world, including 32 Islamic banks and Takaful and Retakaful firms.
The report, which was released at a panel session at the Global Islamic Finance Forum in Kuala Lumpur, Malaysia, is the only numerical measure representing the overall health and development of the Islamic finance industry worldwide.
It is a measure of five key components that combine to depict the bigger picture of the state of Islamic finance in 92 countries – Quantitative Development, Governance, Corporate Social Responsibility, Knowledge and Awareness.
The report said Malaysia is the most developed Islamic finance nation, scoring 93 points. Bahrain (76) and Oman (64) were ranked second and third, respectively.
The other four GCC countries also ranked in the top 10, with the UAE scoring 57 points, along with Jordan, Pakistan and Brunei.
The report said there is a highly uneven development of Islamic finance worldwide, even among the top 10 most developed nations with 53 points separating Malaysia and fifth placed Qatar.
The global aggregate value of Islamic finance assets reached $1.658 trillion at the end of 2013 mainly from Islamic banking assets which accounted for 73 percent followed by Sukuk that contributed $279.8 billion, the report said.
Rasheed Al Maraj, governor of the Central Bank of Bahrain said: “The ranking Bahrain has received is testament to the role we play in the Islamic finance industry.”
Kamal bin Ahmed, Minister of Transportation and acting CEO of the Bahrain EDB added: “We are delighted at the ranking that Bahrain has received and the recognition of the investment that the kingdom has made in developing the industry both here and internationally.
“Islamic finance has an important role to play within the wider financial sector in Bahrain and the GCC and the growth that the sector has seen is testament to that. We are committed to helping the industry to grow in Bahrain, to working towards addressing ways of boosting international growth and also to working with countries across the world as they look to establish Islamic finance industries in their own markets.”
Originally published on www.arabianbusiness.com