Aside from Malaysia, Gulf Cooperation Council (GCC) economies are major players in the Islamic banking industry at large.
This is particularly visible with regard to Islamic investment funds, in turn a rising phenomenon reflecting growing appreciation of prospective investors for ventures in compliance with Sharia or Islamic codes. Certainly, Islamic investment funds offer alternatives to traditional investments.
According to credible sources, there were some 689 Islamic investment funds in 2009, together running assets in total value of $70 billion (Dh257 billion).
These figures were only reconfirmed last week in Bahrain during the 17th Annual World Islamic Banking Conference (WIBC). A hefty 45 per cent of these funds are available in GCC countries.
In turn, Islamic investment funds are uniquely popular in some GCC countries. Not surprisingly, Saudi Arabia leads with 147 funds running investments in excess of $18 billion. With gross domestic product (GDP) of a whopping $375 billion, Saudi Arabia's economy is the largest in GCC and the Arab world.
The UAE follows suit with 55 funds and assets valued at $5.5 billion.
Kuwait comes third with 36 funds and assets worth $3 billion. And for its part, some 20 funds operate in Bahrain with their values approaching $1 billion.
Increasingly, regional investors are embracing Islamic investment funds, partly reflecting post-financial crisis market conditions.
Yet, fresh statistics made available during WIBC suggested sustained growth of assets of Islamic Financial Institutions (IFIs) one the one hand and proliferation of Islamic banking per se on the other.
Total assets of are projected at $895 billion by year-end 2010 compared to $822 billion in 2009.
By one account, assets of IFIs grew by a robust 23 per cent of the period 2006 to 2010. Chances are the figure would cross the $1 trillion psychological line in 2011.
Nevertheless, assets of Islamic banking at large represent a humble share of total assets of banks worldwide.
It is suggested that one third of assets of Islamic banking industry belongs to GCC establishments, certainly an achievement of the six-nation grouping.
To be sure, GCC is home to the largest concentration of IFIs for the simple fact that the region is the primary source of funding for Islamic banking activity.
It is believed that some 300 IFIs operate in 75 countries, more than the number of Muslim countries, thereby showing the proliferation of Islamic banking concepts.
The Organisation of the Islamic Conference (OIC) has 57 members. Established in 2004, Islamic Bank of Britain (IBB), offers financial products compliant with Islamic teachings.
Nevertheless, the Islamic banking industry must overcome some daunting challenges in order for it to enjoy sustained growth rates.
These include developing new short-term products to absorb demand and to help developing a secondary market. The second concern deals with ensuring availability of Sharia scholars with knowledge of conventional and Islamic finance.
The third matter deals with ensuring availability of qualified human resources meeting the requirements of an ever growing industry. It is believed that demand exceeds supply in all three challenges.
Another test deals with ensuring uniformity of application of accounting principles for Islamic banks regardless of location.
The Accounting and Auditing Organisation for Islamic Financial Institutions or (AAOIFI) sets accounting and auditing standards for IFIs.
However, no single body has jurisdiction over Islamic finance houses to implement recommended standards.
The GCC is looked up to as it offers solutions to some of these challenges by serving as the epicentre of the Islamic banking industry.
I contend that the region is up to the challenge with all its formidable resources.
Dr Jasim Ali is Member of Parliament in Bahrain.