heng swee keat : singapore ’ s commitment to the development of islamic finance opening remarks by mr heng swee keat, managing director of the monetary authority of singapore, at the singapore sukuk signing ceremony, singapore, 19 january 2009. * * * your excellency abdulla hasan saif, chairman, the islamic bank of asia, mr viswanathan shankar, group management committee member, standard chartered bank, mr lucien wong, managing partner of allen and gledhill, ladies and gentlemen, it is my pleasure to welcome you this afternoon to the mas and to our overseas guests, a warm welcome to singapore. singapore is committed to the development of islamic finance. the financial industry has encouraged us to develop shariah compliant financial services, by building on our existing strengths in banking, trade finance, capital markets and asset management. mas is an integrated regulator – we oversee all forms of financial services. in performing this role, we adopt a basic principle that financial products and activities with similar underlying risks are given similar regulatory treatment. however, there are distinctive features of islamic finance that put it at a disadvantage, if we were to just apply the conventional regulatory framework. we are committed to a level playing field, by ensuring that islamic financial activities with the same underlying economic essence are accorded the same regulatory treatment as those in conventional finance. in this regard, we have already implemented several measures, including removing the double - imposition of stamp duty for shariah - compliant financing structures, and refining our rules to allow banks to offer murabaha financing and deposits. as a further step, i am happy to announce that with effect from today, singapore - based banks may enter into murabaha interbank placements and offer ijara wa igtina financing. these changes will enable the financial institutions offering islamic finance a wider range of instruments in their management of liquidity and in their matching of assets and liabilities. these changes have been made after detailed consultation with the industry. mas will continue to work closely with the industry to ensure that our regulatory and tax framework, and other necessary infrastructure and conditions are in place to foster good risk management and the further growth of islamic finance in singapore. i announced at the world islamic banking conference in bahrain two months ago that we were in the final stages of setting up a facility to issue sukuk. today ’ s signing ceremony marks a further milestone in our developmental efforts. with the help of our financial and legal advisers

that using digital finance to enhance financial inclusion would boost gdp by between 9 - 14 % in large economies such as indonesia and the philippines, and up to as much as 32 % in cambodia. 3 / 5 bis central bankers'speeches global banks will continue to play an important role in the region, especially in wholesale banking and the intermediation of us dollar flows. but the onus largely falls on asian banks to expand financial inclusion, especially at the retail and small business level. using innovative fintech solutions, they can mobilise untapped savings and provide access to credit for under - banked individuals and businesses. asia is fertile ground for digital innovation in banking. in indonesia and vietnam, only around a third of the population is formally banked. yet, their mobile phone penetration rates are above 100 % – that ’ s more than one phone per person on average! coupled with a young and tech - savvy population, what we have is a ripe environment for mobile banking. and we are seeing interesting innovations across asia, bringing banking services to the broader population. in indonesia, the financial services authority ( ojk ) runs a branchless banking programme with participant banks. called laku pandai, or “ smart man ”, the programme offers banking and financial services to the under - banked, supported by mobile phones and it facilities. dbs bank is collaborating with peer - to - peer ( p2p ) lending platforms to cross - refer clients. dbs will refer to the p2p lenders some of the smaller businesses that it is unable to lend to. in return, the p2p lenders will refer borrowers who have completed two successful rounds of fund raising to dbs for larger commercial loans and other financial solutions such as cash management. the road to financial inclusion is neither short nor easy. but it is an important one. broadening access to financial services will offer asian banks – and fintechs – the opportunity to grow their business while serving a social purpose. financial inclusion will be a key priority in the economic co - operation agenda when singapore assumes the chairmanship of asean next year. conclusion you will be discussing many of these issues in the days ahead. i look forward to hearing your insights. it leaves me now to hand over to john williams for his keynote address. he will speak on us monetary policy – a subject of evergreen interest to the financial industry and central banks around the world. i look out for john ’ s speeches not so much