The Malaysian government will not issue any new Islamic banking licenses to foreign banks for now, a local newspaper said here on Wednesday.

Any future issuance will be done on a step by step basis, the New Strait Times quoted Malaysian Second Finance Minister Nor Mohamed Yakcop as saying.

Bank Negara Malaysia, or Malaysian national bank, so far has issued Islamic banking licenses to there foreign players -- Kuwait Finance House, a Qatar Islamic Bank-led consortium and Saudi Arabia's Al-Rajhi Banking and Investment Corp.

Islamic Banking has emerged as a new reality in the international financial scene since the 1970s. Bank Islam Malaysia Berhad, the first Islamic bank in Malaysian started operations in July 1, 1983 after the country's Islamic Banking Act came into effect on April 7 the same year.

Source: Xinhua