Mohd Razif bin Abd Kadir: Malaysia’s position as an international Islamic financial centre Closing keynote address by Mr Mohd Razif bin Abd Kadir, Deputy Governor of the Central Bank of Malaysia, at the Malaysian Islamic Finance - Issuers and Investors Forum 2006, Kuala Lumpur, 15 August 2006. *  *  *  It is my pleasure to be here at the end of the two-day Malaysian Islamic Finance - Issuers and Investors Forum 2006. The joint hosting of this Forum by Bank Negara Malaysia, the Securities Commission, Labuan Offshore Financial Services Authority (LOFSA) and Bursa Malaysia is testimony to the strong cooperation and close collaboration of the key regulatory and market authorities in the financial services sector in Malaysia. I would regard the Forum as a successful one. The 14 sessions and the 54 distinguished panellists and 8 moderators from various backgrounds and experience have deliberated and focused on issues that are relevant to both the issuers and investors, who are among the key stakeholders of Islamic finance. My closing remarks today will centre on summarising the issues and suggestions that have been put forward to further enhance Malaysia's position as an international Islamic financial centre, and to reiterate and reaffirm the strong commitment of the Government and the relevant regulatory agencies to spearhead this MIFC initiative. In many of the sessions, Malaysia has been recognised as having in place a strong foundation and the right pre-requisites to become an effective and efficient Islamic financial hub. Among them are: i.

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.