[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 1 March, 2005, 07:18 GMT
Malaysia lifts Islamic bank limit
Petronas twin towers
Malaysia is keen for more investment in its Islamic banks
Malaysia's central bank is to relax restrictions on foreign ownership to encourage Islamic banking.

Banks in Malaysia will now be able to sell up to 49% of their Islamic banking units, while the limit on other kinds of bank remains at 30%.

RHB, Malaysia's third-biggest lender, is already scouting for a foreign partner for its new Islamic banking unit, the firm told Reuters.

The moves put Malaysia ahead of a 2007 deadline to open up the sector.

The country's deal to join the World Trade Organisation set that year as a deadline for liberalisation of Islamic banking.

Also on Tuesday, the central bank released growth figures showing Malaysia's economy expanded 7.1% in 2004.

But growth slowed sharply in the fourth quarter to 5.6%, and the central bank said it expected 6% expansion in 2005.

No interest

Malaysia changed the law to allow Islamic banking in 1983.

It has granted licences to three Middle Eastern groups, which - along with local players - mean there are eight fully-operational Islamic banking groups in the country.

Islamic banks offer services which permit modern banking principles while sticking to Islamic law's ban on the payment of interest.

Most of the Malays which make up half the country's population are Muslims.




SEE ALSO:
Country profile: Malaysia
14 Jan 05 |  Country profiles
Mahathir's economic legacy
08 Oct 03 |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific