The Islamic Banking and financial services sector is one of the most robust and mature in the Middle East , remaining resilient in the face of significant external volatility and retaining its role as a driver of economic growth. The degree and impact of competitiveness in the Islamic banking sector is of great importance as this has great impact on the Islamic financial system and the wider economy. A question of interest here is, does competition in the Islamic banking sector boost or hamper economic growth.
Newspapers and journals are filled with frequent reports of comparisons of growth rates between Conventional banks and Islamic banks. The reader never has to wait long to see such headlines in the papers:
“Islamic banking growth outpaces conventional peers in key markets”
“Islamic financing growth outpaces conventional banking in the UAE ”
“Islamic Banking Growth Outstripping Conventional Banking”
In addition to financial articles in magazines and papers, there are also a number of very lengthy annual reports produced by international professional organizations, such as “World Islamic Banking Competitiveness Report” produced by Ernst & Young, the“State of the Global Islamic Economy Report” produced by Thomson Reuters and Dinar Standard, “The Islamic Finance Development Report” by Islamic Corporation for the Development of the Private Sector (ICD) and Thomson Reuters, and the “Islamic Financial Services Industry Stability Report” by the Islamic Financial Services Board (IFSB).
The success of Islamic Banks banks largely depends on the economic strengths of the communities where they operate.
Find Out More in Our Next Coming Issue 26