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Friday, 9 November 2007

Islamic banking has come of age: Al-Shaibei

DOHA: Islamic institutions that can understand and meet the requirements of the Arab region are the need of the hour, said Abdulbasit A al-Shaibei, chief executive officer of International Islamic.Islamic banking has also a key role to play in the region’s ongoing development, he said while delivering a talk on “Islamic financing schemes for development” at the Arab Banking Conference at the Sheraton yesterday.Al-Shaibei said the region’s economic growth called for stronger banks including Islamic institutions.HE the Minister of Finance, Yousef Hussain Kamal had stressed on this in his remarks on the opening day of the conference. Al-Shaibei said Islamic banking had come of age. It has occupied a centre-stage in the global banking system and is playing a significant role in the development process.“Islamic banks have special characteristics and features. They are absolutely Shariah-compliant. These however do not mean Islamic banks are rigid. Being Shariah-compliant does not raise hurdles before the Islamic banks in integrating with the overall economic system,” he said.Islamic banking has numerous tools to cater to the requirements of different strata of the population and various projects.The growing acceptance and popularity of Islamic banks are best illustrated in traditional banks increasingly designing Shariah-compliant products and opening Islamic branches and divisions.“The Arab world has tried both the Eastern and Western economic systems. Islamic banking does not distance itself from any of these. On the other hand, it takes the best from these economic systems,” Al-Shaibei said.Islamic banks are well regulated and controlled by their respective Shariah advisory bodies. Because each Islamic bank has a separate Shariah Advisory Board, there may be differences in the functioning of various Islamic banks. These do not necessarily mean one Islamic bank is more rigid than another.In Islamic banking, those who own capital are in the first line of defence because they are the ones who share risks. Islamic banks follow a very principled policy and approach. They motivate the society to move away from consumerism and luxury.“We call it value-based banking,” the International Islamic CEO said.On the growing relevance and importance of Islamic banking, he said in several countries in the Arab region and in other places with a significant Muslim population, many people do not deal with traditional banks at all. They deal only with Islamic banks.“We need more Islamic banks and financial institutions to meet their needs and use their capital which otherwise will have remained idle,” al-Shaibei said highlighting the experience of International Islamic in establishing the Syrian International Islamic Bank (SIIB). International Islamic has a 30% stake in SIIB.Islamic banks also play a key role in supporting the small and medium scale businesses which have a large base in many Arab countries. Nevertheless, Islamic banks faced several challenges. Foremost among them is providing a human touch to banking.“It is a big task, especially in an era of technology-driven banking. But with collective effort and hard work we can make the difference by sticking to the core values and principles of Islamic banking,” Al-Shaibei said.Quoting HE the Premier and Minister of Foreign Affairs, Sheikh Hamad bin Jassim bin Jabor al-Thani, he said: “Poverty is the greatest challenge to development activities. We must collectively work together to eliminate it.“As Islamic banks we should not focus only on making gains. We must not forget our social responsibility.” - (GT, 9 Nov 07)

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