Faculty / School

Faculty of Business Administration (FBA)

Was this content written or created while at IBA?

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Document Type

Conference Paper

Publication Date

5-29-2007

Author Affiliation

National Commission for Government Reforms (NCGR)

Conference Name

World Islamic Economic Forum

Conference Location

Kuala Lumpur

Conference Dates

May 29, 2007

First Page

1

Last Page

4

Keywords

Islamic finance, Finance, Ethical investments, Poverty alleviation, Risk diversification, Future challenges

Abstract / Description

I would like to state at the very outset that I am a believer in the mainstreaming of Islamic finance as an integral part of global finance. This is the only way it can expand and sustain itself rather than being limited as a small niche market. There are several trends in the global finance which make me optimistic in this regard Convergence between ethical investments and Islamic finance: First, the concerns for ethical investments on the part of a large investor community in the world are similar to the Shariah compliance concerns of the Islamic finance. Social investment and Green Funds in the Western Countries are based on promotion of socially healthy and environment friendly business. Prohibition of incomes from sources disallowed under the Islamic banking can be subsumed in the larger ambit of ethical investment. Many funds have emerged that are exclusively devoted to meet the specifications of investments in ethical products or socially responsible services. Islamic Finance conveniently fits into this food chain because of its natural affinity and congruence with its end-use restrictions. To that extent, this convergence, which is likely to be further strengthened in the future, is a precursor of the form and shape of global finance in the coming decades.

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