Bahrain, UAE And Saudi Arabia Ranked In World's Top Five Islamic Finance Economies By The Islamic Development Bank
Research by Refinitiv and the Islamic Corporation for the Development of the Private Sector (ICD) puts Bahrain in the lead in MENA and third place globally
Bahrain, the UAE and Saudi Arabia have ranked in the world’s top five Islamic finance economies, according to the latest annual Islamic Finance Development Indicator (IFDI).
The Kingdom, which has led MENA in all eight IFDIs to date, ranked in third place globally this year, with the UAE and Saudi Arabia ranking fourth and fifth respectively. 135 countries in total are ranked as part of the index.
The IFDI is part of the annual Islamic Finance Development Report produced by Refinitiv and the Islamic Corporation for the Development of the Private Sector (ICD), the private sector development arm of the Islamic Development Bank (IDB).
The IFDI provides an annual rank for each economy in the global Islamic finance industry, aggregating scores across five areas – quantitative development, knowledge, governance, corporate social responsibility, and awareness.
Bahrain’s high ranking was based upon its robust and supportive regulation for Islamic finance and banking as well as increases in both the number of Islamic banking assets.
Mr. Fahad Yateem, Director of Islamic Financial Institutions Supervision Directorate at the Central Bank of Bahrain said: “I am delighted that Bahrain has once again scored so highly in the IFDI, and particularly for Governance. The results are testament to our longstanding strategy of pioneering yet comprehensive regulation, creating a framework conducive to digital and technological innovation in the industry.
“The recently launched Bahrain Open Banking Framework, which provides detailed guidelines ensuring the holistic implementation of Open Banking for the entire banking industry – the first in the world to incorporate Islamic Finance.
“As the report makes clear, the COVID-19 pandemic has further catalysed digital innovation in the industry as well as consumer uptake of technology. Moreover, it is these technological advancements within Islamic Finance that will be a key driver of the industry’s post-covid recovery.”
Dalal Buhejji, Director, Business Development, Financial Services at the EDB said: “Bahrain was the first in the region to develop a strong banking community and is now building one of the most concentrated FinTech ecosystems in the world. The Islamic finance sector has been a key part of that development, with ninety six billion dollars of assets held in the Kingdom, which accounts for 124% of Bahrain’s GDP.
“We are continuously implementing new initiatives and policy tools to further develop Bahrain’s standing in Islamic finance, including new Takaful models and Sharia-compliant investment tools.
“The Kingdom’s high ranking is testament to our innovative and pioneering approach, as well as the advanced financial environment that we offer for both established financial institutions and startups. We look forward to continuing to build on our growth.”
Bahrain is home to the region’s largest concentration of Islamic finance institutions that deal in almost every area of Islamic finance and Islamic products. The Bahrain Islamic Bank was established in the Kingdom in 1979, and Bahrain has since worked to nurture concepts, rules, and standards of Sharia banking compliance in Islamic banks.
The report recognised UAE’s efforts in the governance space, highlighting the banking, takaful and sukuk regulations that were introduced in 2019, as well as the unified global legal framework for Islamic finance launched in May 2020. The UAE was also recognised as the top Islamic Finance educator in the region boasting the highest number of Islamic Finance Education Providers across the GCC at 52 – including 12 that provide degrees.
