The International Monetary Fund (IMF) has finally incorporated Islamic Finance into its financial sector assessments beginning January 1, 2019, calling Islamic Finance a growing sector. Under a proposal by the IMF’s executive board, the guidance issued by Malaysia-based Islamic Financial Services Board (IFSB) would be incorporated into IMF assessments to address the regulation and supervision of Islamic banks. What this entails is that the fund that used to be specific for traditional banking, now accepts Islamic finance principles, making it a globally-accepted parallel system to the current Interest-based financial system. As per Thomson Reuters’ projections, Islamic Finance assets are projected to grow to $3.2 trillion by 2020. According to the recent PricewaterhouseCoopers study, these assets were about $2 trillion in 2016, and in 2017 these were calculated to be $2.6 trillion, indicating strong growth. The experts say that Islamic finance market registered about 15% growth last year. As per John Lossifidis, the CEO of one Islamic bank, IMF’s endorsement of Islamic financial system is the proof of the global growth of Islamic finance.
To support its decision to endorse Sharia’h principles of finance, the IMF has released a working paper titled ‘The Core Principles for Islamic Finance Regulations and Assessment Methodology’. It would be opportune to quote an IMF statement on this development. The statement read, “The Islamic finance sector continues to grow and evolve in size and complexity, with Islamic banking offered in more than 60 countries. The growth of Islamic finance presents important opportunities to strengthen financial inclusion, deepen financial markets, and mobilize funding for development by offering new modes of finance and attracting ‘unbanked’ populations that have not participated in the financial system”.
Religious feelings apart, it’s gaining traction the world over as a reliable financial model. Apart from the current IMF recognition, the World Bank has designated Islamic finance as a priority area. However, there’s a concern, which the Managing Director of the IMF, even in the past has raised. And that is the dearth of trained Islamic banking professionals. She was addressing an international conference in Kuwait and emphasized the importance of unlocking the potential of Islamic finance sector by bringing in well-qualified professionals who can help to meet the high demand of Islamic finance products. There’s a dearth of Islamic Finance graduates, primarily in the GCC and Far-eastern regions. The employers are currently hiring regular finance graduates and training them on Islamic finance. The experts are crying hoarse for appropriately and specifically qualified potential employees for the industry, as is reflected in Ms. Lagarde’s statement above.
It’s high time that our Universities wake up and prepare students for this industry. The surge in unemployment coupled with a growing demand of these professionals is an opportunity that can’t be afforded to be missed. The new programs could train students on conventional as well as Islamic finance. This will ensure their employability anywhere. For those interested in jobs overseas, Islamic Finance knowledge and degree name will help. Islamic Banking and Finance can’t remain away from India for long. And the moment it’s allowed, these professionals will be in highest demand, and they can come back and join local banks. As of now, this industry is picking up just because of its innate beauty. The top experts include many Non-Muslims. There’s little contribution of Muslims in its rise. If even at this stage, we do not give it its due importance and qualified graduates, we shall be doing a disservice to the financial sector in general and Islamic model of finance, in specific. When Non-Muslims have worked so hard on this model and are giving it its due place, despite Islamophobia ruling the roost, is it not the shame for us- I included- not having degrees preparing our students for the same.