Infrastructure Financing through Islamic
Finance in the Islamic Countries
92
Corporation Berhad and Lembaga Tabung Haji. The relative size of different types of financial
institutions along with the oversight bodies responsible for regulating them are shown in
Table 4.2.1.
Table 4.2. 1: Financial Institutions Types and Oversight Authorities (2017)
Institution Type Percentage of
Assets
Oversight Authority
Banks, insurance and takaful
operators and DFIsa
59.9% Bank Negara Malaysia (BNM)
Provident and pension finds 18.9% Government Ministries
Other DFIs b 1.8% Government Ministries
Cooperatives 0.5% Malaysia Cooperatives Societies
Commission
Fund management industry 14.4% Securities Commission Malaysia
Securitization vehicles 1.1% Securities Commission Malaysia
Leasing and factoring companies 0.5% No oversight authorities
Building society 0.9% No oversight authorities
Othersc 2.1% Government Ministries
a-Regulated by the Development Financial Institutions Act 2002 (DFIA 2002);
b-Not regulated by DFIA 2002.
c-These include pawn brokers, money lenders, non-bank education finance providers and hire-purchases,
government owned trustee companies, etc.
Source: BNM (2017: 31).
4.2.1.1. Islamic Financial Industry
The Islamic financial industry in Malaysia is ranked the most developed globally according to
the Islamic Finance Development Indicator developed by ICD and Thomson Reuters (2017).
Ranking top in the quantitative development indicator, Malaysia ranks third in terms of Islamic
finance assets valued at USD 405.985 billion in 2016.34 Chart 4.2.3 shows the size and
composition of the Islamic financial sector in Malaysia. The Islamic capital market is the
dominant sector with a valuation of RM 1.893 trillion constituting 59.2% of the national capital
markets sector. The Islamic banking assets worth RM 829.81 billion form 30% of the overall
banking sector assets and the takaful sector is the smallest both in terms of size (RM 29.289
billion) and share of the sector (10.1%).
34 The countries with the highest Islamic financial assets are Iran (USD 545.377 billion) followed by Saudi Arabia (USD
472,654) (ICD and TR 2017: 29).