Calls grow for Islamic finance

Malaysia puts pressure on Seoul to allow ‘sukuk’ transactions

By Kim Da-ye

The Malaysian government’s recent encouragement of Korean financial institutions to issue “sukuk” instead of ringgit-denominated bonds is part of the country’s aim to foster a strong Islamic financial hub, sources said Thursday. Sukuk, which are similar to bonds, are trust certificates that are compliant to Islamic principles and jurisprudence called Shariah.

“Because we want to develop an Islamic financial market, we give tax exemptions for bond holders and sukuk holders here,” said a senior official in the Malaysian Ministry of Finance.