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‘Barriers remain’ in expansion of Islamic finance – GAAPWeb June 22, 2007

Posted by islamicfinanceaffairs in Uncategorized.
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‘Barriers remain’ in expansion of Islamic finance – GAAPWeb

There are still some barriers to the expansion of the Islamic finance industry, a new survey from the Big 4 firm KPMG has found.

A
lack of qualified Islamic bankers, weaknesses in transparency and
financial reporting and the ongoing matter of regulatory capital are
all obstacles to the growth of the sector, the KPMG report, titled
Growth and Diversification in Islamic Finance, stated.

The survey contains case studies of HSBC Amanah and Unicorn Investment Bank.

Paul
Furneaux, financial services partner with KPMG in the UK, explains:
“Respondents were aware that they would have to be more creative in
product innovation in areas such as derivatives, swaps and options, but
recognised that the market is currently at the bottom of a steep
learning curve.”

It will be important to involve Islamic
scholars to help determine the level of “sophistication” of the
products, added Mr Furneaux.

Respondents to KPMG’s survey said that the market must solidify and define itself.

Islamic law prohibits the collection and payment of interest.

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