Diversification of Islamic Financial Insturments
21
Product/Process Middle East North Africa Malaysia Indonesia
all limits are
properly
assigned and
controlled
all limits are
properly
assigned and
controlled
Back Office Standard back-
office
functionalities to
facilitate
completion of
deals, sending of
notices and swift
messages to
transacting
parties and to
handle all
accounting
entries and
reporting
Standard back-
office
functionalities to
facilitate
completion of
deals, sending of
notices and swift
messages to
transacting
parties and to
handle all
accounting
entries and
reporting
Same as ME and
Africa
Same as ME and
Africa
Source: Created by Author
Table 10: Trade Finance
PRODUCT/PROCESS MIDDLE EAST NORTH AFRICA MALAYSIA INDONESIA
Complete LC
Processing based
on Murabahah,
Wakalah and
Musharakah
Concepts
Standard
requirements
due to UCP
practices
Standard
requirements
due to UCP
practices
Same as ME and
Africa
Same as ME
and Africa
Bills Standard
requirements
due to UCP
practices
Standard
requirements
due to UCP
practices
Same as ME and
Africa
Same as ME
and Africa
Guarantees Standard
requirements
due to UCP
practices
Standard
requirements
due to UCP
practices
Same as ME and
Africa
Same as ME
and Africa
Complete LC
Processing based
on Murabahah,
Wakalah and
Musharakah
Concepts
Standard
requirements
due to UCP
practices
Standard
requirements
due to UCP
practices
Same as ME and
Africa
Same as ME
and Africa
Source: Created by Author
Trend wise, 2016 saw a decline in Islamic banking slightly, which is largely attributable to an
adjustment to the value of Islamic banking assets in Iran, in addition to exchange rate
depreciations in some key Islamic banking markets. In currency rate impact on Islamic
banking, Malaysia and Turkey contributed the most, as Malaysia’s Islamic banking assets grew
by 9.5% in the year to 2Q2016, and the Turkish participation banking sector’s assets expanded