The central bank has reiterated its stance that it will not regulate the Islamic banking market here in Singapore.
At a conference on Islamic Finance on Tuesday, the Monetary Authority of Singapore (MAS) instead argued that Shariah-compliance should be regulated internally as part of a bank's good practice in governance and control. The Islamic banking market is estimated to be worth as much as US$800 billion worldwide and it is growing by up to 30 per cent in some markets.
While there has been a push for Singapore to have a greater pie of the market, the MAS said regulation may be counter-productive in small markets.
Chia Der Jiun, Executive Director, Prudential Policy, MAS, said: "Much of the business is going to be wholesale, off-shore, international counter parties, and these counter parties may reside in the Gulf, in Southeast Asia, and they have Shariah interpretations and standards that may be somewhat unique in their jurisdictions."
The response came amid talk that regulation may be needed to help boost investor confidence. Some industry players said this will help attract more Islamic private wealth from overseas and further increase Singapore's status as a wealth management hub.
Aimi Zulhazmi, Principal Officer, BIMB Trust, said: "People are looking at Singapore as a leading player in the financial market. A lot of wealth especially on the private wealth management resides in Singapore."
While the MAS said there is no need for a separate Islamic banking regulatory framework, it noted that more disclosures are needed as they would help investors make better investment choices. - CNA/vm
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