Executive summary
Islamic financе
- The basic principles of Islamic banking are prohibiting lending interest, speculation, uncertainty, and financing of Sharia-insulting activities.
- The key principles of Islamic finance are riba, maysir, gharar, and haram.
- The main products of Islamic finance are Murabaha, Ijarah, Musharakah, Murabaha, Sukuk, Tawarruq, Mudarabah Wadiah, and Zakat.
- The main players of Islamic finance by assets are GCC-, MENA-, and South-Eastern countries, such as Iran, Saudi Arabia, Malaysia, South Africa, and Qatar.
- Islamic finance is better developed in Malaysia, Saudi Arabia, Indonesia, Bahrain, and Kuwait.
The state of Islamic banking
- Islamic banking accounts for 70% of Islamic finance assets.
- Islamic banking is growing rapidly: assets have increased from $1.8 tn to $2.8 tn (or +55%) in four years. And the industry is expected to grow to $4 tn by 2026.
- The leading role in the development of Islamic banking belongs to the GCC countries.
- The world's largest Islamic banks are in Malaysia, Indonesia, Bangladesh, and Bahrain. Malaysia also had the largest share of total assets.
- 42 of 100 Islamic banks are located in Asia. These banks held 29% of the total assets of the top 100 Islamic banks but generated only 16% of the net profits.
- Saudi Arabia-based Al Rajhi Bank topped the ranking of the largest Islamic banks in the world.
- Factors influencing the demand for Islamic banking: the growth of the Muslim population, digitization of the Islamic economy, and growth of demand and consumption of halal products around the world.
- Factors influencing the supply of Islamic banking: national strategies, government regulation, and increased trade within the Organisation of Islamic Cooperation (OIC).
Promising digital services in Islamic banking
