KUALA LUMPUR: Malaysia's central bank awarded two foreign currency Islamic banking licences to companies in Kuwait and Indonesia as it seeks to broaden the country's Sharia finance success beyond its domestic market.Kuwait's Al Aqeelah and Bank Muamalat Indonesia have been granted licences to do Islamic banking business in Malaysia with residents and non-residents in foreign currencies and limited ringgit transactions, central bank deputy governor Mohammed Razif Abdul Kadir said yesterday.

"The process of setting up takes time, a few months perhaps," Kadir said.

"Not only are we reviewing (more applications), we are driving hard."

Malaysia is a key player in Islamic finance but some critics say its success has largely been domestic, where active Islamic debt issuance has made it the world's largest Sharia bond market.

About $66 billion or 62.6 per cent of global outstanding Sharia bond issuance as at end-June was from Malaysia.

The country now hopes to replicate its success in Islamic bonds in the international Sharia banking and insurance and fund and wealth management businesses.

Foreign currency Islamic banks are given a 10-year tax exemption up to year of assessment 2016 on income earned from foreign currency Sharia banking business.

"In terms of tax incentives, I think we are on par with the Middle East," he said.

Malaysia's market regulator has awarded Islamic fund management licences to several foreign firms including Kuwait-based Global Investment House, India's Reliance Capital, Kuwait Finance House and DBS Asset Management, a subsidiary of Singapore's DBS Group.

Kadir said sukuk were now a mainstream investment with competitive pricing helping to broaden their appeal beyond the Muslim investor base.