The prospects for Islamic finance remains strong given the growing interest towards Shariah-compliant investment asset class, despite the inevitable correlation between oil price and Islamic wealth.
Bahrain Central Bank Governor Rasheed Al Maraj said while there were some headwinds recently, the long-term growth picture within its strongest markets in the Middle East and Southeast Asia remained robust.
"There is a clear demand for Shariah-compliant financial products and services. As the industry matures, it is able to do more to meet that demand," he told Malaysian News Agency, Bernama, in an email interview.
Rasheed also highlighted that it was imperative for the industry to continue addressing challenges that could hamper long-term growth such as investment in education and training to ensure that the supply of skilled professionals meets growing demand.
In an effort to reduce the difference in costs between Islamic and conventional finances, the Central Bank of Bahrain has been working with institutions such as the Accounting and Auditing Organisation for Islamic Financial Institutions and International Islamic Financial Market to achieve greater standardisation.
"The Islamic finance sector is increasingly being recognised as more than just a niche player - the fact that the International Monetary Fund is including Islamic finance within its supervisory frameworks is proof of this.
"This is a trend that we expect will continue in the future," he added.
The Malaysian International Islamic Financial Centre (MIFC), says Islamic funds will likely grow 5.05 per cent per annum to reach $77 billion by 2019, partly driven by growing interest from Muslim and non-Muslim investors.
However, the decline in oil prices have taken a toll on Islamic wealth creation globally whereby as at the third quarter of last year, the total global Islamic asset under management fell to $60.2 billion from $75.8bn in the same period in 2014.
In its "Islamic Funds Industry: 2015 Review & Outlook", the MIFC said the number of Islamic funds also declined to 1,030 during the third quarter of 2015 from 1,161 in the third quarter of the corresponding year.