KUALA LUMPUR, March 1: Malaysia's central bank said on Monday it was on track to issue up to three Islamic banking licences to foreign firms this year as part of plans to become a regional Islamic financing hub.

"Yes, why should we delay?" central Bank Negara Malaysia assistant governor Mohd Razif Abdul Kadir said in reply to reporters' questions on whether licences would be out in 2004.

He declined to give further details. Islamic banking, which bars interest payments in favour of profit-sharing, accounts for about a 10th of Malaysia's banking assets. The government wants it to rise to 20 per cent by 2010.

Malaysia said last September it will issue up to three new Islamic banking licences to foreign firms. -Reuters