##ul industry. for this, bank negara malaysia has taken a strategic move to further strengthen malaysia's edge as a retakaful hub by inviting strong and qualified applicants, both local and foreign, to make malaysia as their platform for retakaful activities. a strong takaful market in malaysia, supported by the experience and expertise of several niche players in retakaful operation during the last two decades, would provide a strong base for a global retakaful operation to flourish. under this initiative, qualified local and foreign applicants will be allowed to conduct both malaysian and international currencies retakaful business. flexibility is accorded to the retakaful operators to conduct its retakaful business in malaysia by way of an incorporated either entity or a branch. foreign applicants are also welcomed to conduct retakaful business in malaysia through a joint - venture with malaysian companies. it is anticipated that this measure would serve as a catalyst in our efforts for malaysia to become the centre for takaful and retakaful business through the establishment of a significant number of strong and reputable retakaful operators. for the potential investors in these ventures, i wish to highlight that malaysia maintains a liberal foreign exchange administration regime where investors are freely able to obtain ringgit and foreign currencies to fund their investments in malaysia. please do forget the foreign exchange administration rules introduced during the 1997 / 1998 asian financial crisis. we have even further relaxed the foreign exchange administration rules to allow resident and foreign issuers to raise foreign currency - denominated bonds, including islamic bonds or sukuks. foreigners investing in malaysia are also free to hedge with onshore banks their committed flow of funds such as the repatriation of investment proceeds, dividends and profits from malaysia as well as the purchase of ringgit assets in malaysia. there is free mobility of inward and outward movement of funds relating to both foreign direct investment and portfolio capital investments. the second key area that malaysia can play a major role is sukuk issuance, origination and trading. the sukuk market serves as an important platform, complementing conventional bonds in enhancing the effectiveness and efficiency for the mobilization and allocation of funds within national financial systems and in the international financial system. significant economic growth is taking place in asia and the middle east following privatization and implementation of infrastructure projects. this opens up tremendous opportunities for government entities, multinational corporations and multinational development institutions to raise funds through the issuance of sukuks to meet their financing needs. the phenomena

zamani abdul ghani : malaysia ’ s role as an international islamic financial centre keynote address by mr zamani abdul ghani, deputy governor of the central bank of malaysia, at the international takaful summit 2007 " mainstreaming islamic finance : malaysia as international islamic financial centre ", london, 1 november 2007. * i. * * introduction i am indeed pleased to be invited to this international takaful summit 2007 hosted by the islamic banking and finance institute of malaysia ( ibfim ). the occasion of this forum is indeed an excellent opportunity for the regulators, industry practitioners and investors to discuss recent developments and key issues in islamic finance, particularly on takaful. it would also serve as an excellent platform in providing greater awareness on the innovative products and services available in the takaful and retakaful market. ibfim has certainly played an important role in harnessing the critical talent needs of the islamic financial industry, not only in malaysia, but has extended its role internationally as evidenced by this inaugural summit in europe. this summit also signifies an important strategic shift in our promotional approach for the takaful and retakaful industry. this shift is towards a more active initiative to heighten competitive elements and to draw greater foreign participation in this industry where malaysia has a strong edge, and we are positive that this industry will grow stronger with a win - win partnership with the right partners. my remarks today will dwell on three areas. the first is to share with you selected major developments in the malaysian islamic finance industry that signify the vast potential for continued strong growth of islamic banking and takaful in malaysia. i will then endeavour to provide some highlights on how malaysia has strengthen its position as a preferred platform for global takaful and retakaful activities, within a broader aspiration for malaysia to be one of the key international islamic financial centres. finally, i will present some areas in the development of global islamic finance, including takaful and retakaful, where malaysia can play a major role. ii. significant developments in malaysian economy and islamic financial industry a decade after the asian financial crisis, the malaysian economy including its financial system is at its strongest position. with this growth, malaysia has greater economic flexibility to shift to new areas of growth and thus sustain the development momentum. economic growth has been achieved with relative price stability, low unemployment and strong external balances. the level of savings remains high at 37 percent as a percentage to the gdp while the level of external reserves remains