These ground-breaking initiatives are aimed at providing operational flexibility, cost effectiveness and conducive environment for Islamic finance business in international currencies : i.  grant approval under the existing Islamic banks and takaful licence to set up International Currency Business Units within these institutions. ii. issuance of new conditional licences for the setting up of International Islamic Banks and International Takaful Operators under the Islamic Banking Act and Takaful Act respectively to qualified foreign and Malaysian financial institutions to conduct business in international currencies. BIS Review 75/2006  1  iii. Labuan offshore Islamic banks and the Islamic divisions of offshore banks as well as offshore takaful operators have been given greater flexibility in their business operations to open operation offices anywhere in Malaysia with minimal presence in Labuan. The Government is finalising an attractive tax package to ensure our competitiveness in the global market place. This policy should be capitalised by the existing Islamic financial institutions in Malaysia, as well as for the new players to take the opportunity to establish their presence in Malaysia. We realised that a successful Islamic financial centre cannot depend on low cost alone but much depending on the overall efficiency in the delivery system. To ensure this, the MIFC Executive Committee comprising a high-powered group of 28 top officials from the relevant Ministries, Government Departments and Agencies, the key financial and market regulators, and industry representatives from the banking and takaful sectors has been set up.

In the area of research and training in Islamic banking and finance, an industry-owned institute named Islamic Banking and Finance Institute Malaysia (IBFIM) was established. IBFIM will become a one-stop centre for the purposes of education, training and research. On the international front, significant progress was achieved on two initiatives, namely, the International Islamic Finance Market (IIFM) and the international standard-setting body. BNM participated actively in both initiatives. The standard-setting body, to be located in Malaysia, will focus on developing international best practices and prudential standards governing the supervision and regulation of Islamic financial institutions. These encouraging developments will contribute further to the overall development of the global Islamic financial system. The insurance industry maintained a positive growth trend in premium income for the third consecutive year since the Asian crisis. Premium income grew by 12.4% in 2001 while the capitalisation of insurers strengthened further to RM4.9 billion as at the end of 2001. The increase in the minimum capital requirement to RM100 million, with effect from 30 September 2001, has been instrumental in advancing the consolidation of the industry. Since 1999, a total of eight mergers and acquisitions were completed. Seven other M&As involving 13 insurers are currently at various stages of implementation. In 2001, macroeconomic policy was focused on managing the downside risks arising from the slowdown in the major economies. Macroeconomic policies were targeted at creating a positive and enabling environment for domestic demand to support growth.