KUALA LUMPUR: Lack of human capital is a major barrier to the country’s growth in Islamic finance and banking, and there is a need to accelerate the human capital if Malaysia is to be the global hub for Islamic banking, experts said.
Institut Bank-bank Malaysia (IBBM) chief executive officer Dr Kamal Khir said Malaysia had the legal framework and support from the government and the central bank, as well as the technical know-how.
“But we do not have enough qualified professionals to run the Islamic banking and finance industry. There is a brain-drain crisis going on in the country,” he said in an interview with The Edge Financial Daily.
Adequate human capital was necessary as the country was facing stiff competition from Brunei, Singapore and the UK to be the global hub for Islamic banking, he said, when commenting on challenges faced by the country’s Islamic banking industry.
“We would have to double up, in fact, triple the human capital to speed up the growth (of Islamic banking and finance) and achieve that status,” he said, adding that other challenges were to standardise procedures for Islamic banking products and interpretations for various Islamic terminologies.
IBBM and Monash University are the joint organisers of a two-day international Islamic conference entitled — “35 Years on The Future of Islamic Finance” — which begins in Kuala Lumpur today. The conference will see 63 papers presented by practitioners in the corporate sector and academicians.
Monash University director of banking and finance unit Professor Bala Shanmugam said Malaysia had the advantage to be a global Islamic finance hub.
He cited Malaysia had the first mover’s advantage in packaging banking products using Islamic principles such as “musyarakah” and “murabahah”, as well as providing education and training in Islamic finance and banking.
The International Centre for Education in Islamic Finance (INCEIF) had achieved university status to provide training in Islamic banking and finance recently, he said.
IBBM is giving existing credit professionals certification in Islamic finance and banking operations.
Bala said the need for human capital would be greater as demand for Islamic banking products increased. The government wanted Islamic banks to capture at least 20% share of the banking industry, he said.