Islamic banking and finance will continue to get good response in multi-racial, multi-religious Malaysia because of the system's ethical and accountability principles, says Bank Islam Malaysia Bhd.

Its Chief Strategy Officer Hizamuddin Jamalluddin said acceptance of the Islamic system will continue to grow due to customers' return considerations on Islamic financial products.

"Projects financed by Islamic financial institutions comprise one-third of the Gross Domestic Product, a very good achievement, while nearly 27 per cent of the banking assets in the country are Islamic banking assets.

"We are confident Bank Negara Malaysia's vision that by 2020 Islamic banking will command 40 per cent of the domestic financial market will be achieved," he told reporters when met at the Media Appreciation Night here today.

Hizamuddin said almost all financial institutions in the country now offer Islamic banking services whether through a subsidiary or through window services.

He said when Bank Islam was set up in 1983, the big challenge was educating the public on the Islamic banking system, but now that nearly all financial institutions in the country have Islamic banking units, it has become easier for Bank Islam to strengthen its position and grow its market.

Bank Islam, now Malaysia's third largest Islamic financial institution, is keen to develop wakaf land in Sabah and Sarawak in collaboration with the respective state Islamic religious council, just as it has done in Peninsular Malaysia, he added. -- BERNAMA