An International Islamic Money Market will start to take shape in Malaysia's offshore financial center of Labuan by the end of next month with six member countries, an official said Friday.
Bahrain, Saudi Arabia, Indonesia, Malaysia, Brunei and Sudan will sign a pact by end-September to set up the market, said Labuan Offshore Financial Services Authority (LOFSA) director-general Noorazman A. Aziz.
"Once this is signed, there will be a memorandum of understanding on what we need to do as a country," he was quoted as saying by Bernama news agency at a conference in Labuan.
Noorazman estimated there was some one trillion dollars worth of Islamic funds available in the global market which has not been tapped due to a lack of linkages among industry players.
The Islamic money market, which incorporates a globally accepted Islamic financial set-up, would improve cooperation between Malaysia and investors from Middle-East countries, he said.
"The government has spent a lot of money and we have to make this happen," he added.
No other details were available and LOFSA officials were not reachable for comments.
The move is part of efforts by predominantly Muslim Malaysia to be the key Islamic financial center in Asia. It has formed a taskforce to draw up plans to develop an International Islamic Financial Market in Labuan.
Labuan island, off the coast of Sabah state on Borneo island, was declared an international offshore financial center in 1990.
Noorazman said a recent assessment by the Australian-based Asia Pacific Group on Money Laundering Activities found Labuan to be "clean and well-regulated".
He said Labuan was given a low-risk rating by the group in terms of its vulnerability to money laundering activities.
There are some 3,000 companies registered in Labuan, including 56 offshore banks, 90 insurance and insurance-related entities, 20 trust companies, 23 leasing companies and 13 fund managers. —(AFP)
©Agence France Presse
© 2001 Mena Report (www.menareport.com)
