Improving Banking Supervisory Mechanisms
In the OIC Member Countries
67
Figure 41: Growth Rate of Islamic Banking
Source: EY, World Islamic Banking Competitiveness
- What are the major differences of Islamic Banking?
Recently, there has also been growing interest from regulators and researchers about the
working mechanism of Islamic banking. Thorsten et al. (2013) compared conventional and
Islamic banking and stated, "The current global financial crisis has not only shed doubts on the
proper functioning of conventional ‘Western’ banking, but has also increased the attention on
Islamic banking.” Academics and policy-makers observe the advantages of Shariah-compliant
financial products, as the mismatch of short-term, on-sight demandable deposits contracts
with long-term uncertain loan contracts is mitigated through equity elements.
Figure 42: Islamic Banking Assets to Total Conventional Assets
Source: KFHR
Saudi Arabia Malaysia UAE Kuwait Qatar Turkey Indonesia
11%
20%
14%
6%
31% 29%
42%
Growth Rate of Islamic Banking (2013)
0
10
20
30
40
50
60
70
80
90
100
Turkey Indonesia Malaysia Pakistan Saudi Arabia UAE
Total Islamic Banking Assets / Total Conventional Assets
2006
2007
2008
2009
2010
2011
2012
2013