Countries took Kuwaiti Islamic banking practices on board - CBK chief

KUWAIT, May 2 (KUNA) -- Kuwait Central Bank Governor Mohammad Al-Hashel has stated that several countries have been successful in implementing the policies of Kuwait's Islamic financial institutions.
Al-Hashel made the remarks at a two-day international conference on Islamic finance, hosted by CBK under the auspices of His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah.
Islamic finance has witnessed "exceptional" global growth over the recent four decades, owing to assets worth USD 2.2 trillion, said Al-Hashel.
Kuwait, for its part, has been able to achieve a financial system considered to be "amongst the strongest and most secure and stable" in the region, and a banking system that stimulates the growth of Islamic and conventional banks alike, he added.
From a small four-member staff single firm in 1978, Kuwait's Islamic financial industry now occupies 40 percent of the total banking sector, said the CBK chief.
It includes five Islamic banks with shared assets worth USD 96 billion, employing 12,000 employees across 600 branches.
A total 10 countries around the world benefit from a dual banking system, the assets of which Islamic banks own 20 percent. Another 44 countries have put in place laws regulating the Islamic financial sector's role reflecting its importance.
Despite these positive signs, there remain several economic, financial and social challenges, he indicated.
These include fluctuations to the price of goods This presents the need for countries to diversify their economies in order to ensure sustainability in growth.
Al-Hashel said that this was a daunting task, explaining for instance that infrastructure projects accommodating these plans in Asia, the Middle East and North Africa until 2020 are worth a whopping USD 10 trillion.
Developing economies, in particular, are also faced with the threat of economic repercussions pertaining to the outward flow of foreign investments.
This is where the role of Islamic financial institutions comes in, due to their multi-faceted approach to investment and their significant contribution to financial stability. (end) fnk.sd