Malaysia's Agrobank becomes fully Islamic

[KUALA LUMPUR] Malaysia's Agrobank, an unlisted unit owned by the Finance Ministry, on Tuesday began operations as a full-fledged Islamic bank, continuing the country's efforts to boost asset ownership for its Islamic banking sector.

Agrobank accounts for 32 per cent of loans provided to Malaysia's food production sector and it has managed to convert deposits worth 352 million ringgit (US$94.2 million) from conventional into Islamic, chairman Faizah Mohd Tahir said at a press event on Tuesday.

Malaysia has one of the world's largest Islamic finance sectors and authorities envision the industry accounting for 40 per cent of the country's total banking assets by 2020 compared with 23 per cent last year.

Malaysia Building Society Bhd, a non-bank lender and once a target for a proposed merger with CIMB and RHB Capital, said in April it had a five-year time frame to complete its conversion into an Islamic bank.

REUTERS