Zeti Akhtar Aziz: Further strengthening of the institutional structure for Islamic banking business operations Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the launch of RHB Islamic Bank Berhad, Kuala Lumpur, 1 March 2005. *  *  *  "Building on the strong foundations of a well-developed, comprehensive Islamic financial system and strengthening its international inter-linkages and thus its global integration, has enhanced Malaysia's potential to be an international centre for Islamic finance. Our first Islamic bank, established in 1983, marked the beginning of the Islamic banking and finance chapter for our country. The opening of Islamic banking windows by financial institutions in 1993 paved the way for a more effective and efficient distribution channel for lslamic banking services to achieve the critical mass on a nationwide scale. These developments have been reinforced by the progress achieved in the establishment of the Islamic financial infrastructure, including the money and capital markets, the regulatory and supervisory structure, and most importantly, the legal and shariah framework. Today marks the emergence of a new era, with the establishment of an Islamic subsidiary of a banking group as Islamic banking in our financial system enters into the third strategic phase of the institutional development of Islamic banking and finance in Malaysia". Ladies and Gentlemen, It is my pleasure to be here this morning on the occasion of the official launch of RHB Islamic Bank Berhad. Indeed, today, we are witnessing the first transformation of an Islamic banking window to an Islamic subsidiary.

Ladies and Gentlemen,  BIS Review 13/2005  1  On this occasion of the official launch of RHB Islamic Bank Berhad, it is with pleasure that I congratulate the RHB Group. With this structure, the management team of RHB Islamic Bank will now have the potential to maximise the full advantage of the universal Islamic banking licence issued, which allows a wide range of business to be undertaken ranging from retail and corporate banking to investment banking and fund management. Such Islamic subsidiaries are expected to exploit new growth areas such as wealth management and profit and risk sharing ventures, which are newly emerging as rewarding banking activities. In this connection, it is vital that, at the onset, the business strategies are aligned with the right people by developing a pool of the required skills and talent, and putting in place the proper risk management systems and good corporate governance practices. I welcome the initiative to establish the Islamic subsidiary by the RHB Group and look forward to the contributions of RHB Islamic Bank to the growth of the Islamic banking industry. This advance forward is the first step that brings us to the third strategic phase of the institutional development of Islamic banking and finance in the country. I wish RHB Islamic Bank every success in this endeavour. I trust that the Islamic financial community would look forward to benefit from this new development. Ladies and Gentlemen, Dengan lafaz Bismillahirrahmanirrahim, saya dengan sukacitanya merasmikan pelancaran RHB Islamic Bank. Sekian, terima kasih.