Sharia compliant banking withstands recession shocks

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From Fazle Rashid
NEW YORK, Dec 08: Sharia compliant banking has not only withstood the devastation wrought by the tearing global economic meltdown, but has made significant stride during this turbulent period. For a while it was almost as if the global financial crisis had not happened, wrote an analyst in an exhaustive article on Sharia banking today.
Islamic banking witnessed a strong growth this year. The meltdown that brought giants like Citigroup, Bank of America, Merrill Lynch, JP Morgan Chase to their knees, the sharia compliant banking system stood its ground firmly. Islamic banking recorded a whopping 29 percent growth rate in its assets this year to $822 billion. Twenty more branches of sharia compliant banks were opened this year.
Sharia compliant banking has its strongest root in Malaysia. Indonesia, Pakistan and Bangladesh -- three largest populated Muslim countries have not been active promoters of Islamic banking. China which has about 80 million Muslim population " has started to wake up to the opportunities of Islamic finance. China has already given permission to one of its banks, Bank of Ningxia, to sharia compliant banking. General Electric (GE) -- the US giant became the first foreign company to issue "Sukuk." Sukuk is comparable to common bond. Islamic finance at the moment represents only one percent of the global financial system, the Muslim world accounts for 7.6 of the gross domestic product. Growth in 57 Muslim nations is much higher than in the rest of the world, according to Statistical Economic and Social Research and Training Centre and Training Centres for Islamic Countries.