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Saturday, 18 July 2009

Islamic banking still almost unhurts by global economic meltdown: ICCB President

ICCB President Mahbubur Rahman on Thursday said, the relative stability of Islamic banking institution, in current recession has drawn attention of all concerned.

Even the Vatican said banks should look at the rules of Islamic finance to restore confidence amongst their clients at a time of global economic crisis. Available information says that about US$ 1 trillion of assets are managed according to Islamic investment principles.

ICCB President Mahbubur Rahman made the observation while inaugurating a day-long ICC workshop on "International Trade Payment: Islamic Trade Finance" at the Bangladesh China Friendship Conference Centre organized for the bankers here today, said a release of ICCB.

The topic of Islamic Finance has emerged in recent decades as one of the most important trends in the financial world. There has always been a demand in a number of countries for financial products and services that conform to the Shariah (Islamic law).

With the development of viable Islamic alternatives to conventional finance, Muslims are beginning to find Shariah compliant solutions to their financial needs, Mahbubur Rahman mentioned. The ICCB President said, it is evident that Islamic finance was practiced predominantly in the Muslim world throughout the Middle Ages, fostering trade and business activities. In Spain and the Mediterranean and Baltic States, Islamic merchants became indispensable middlemen for trading activities.

It is claimed that many concepts, techniques, and instruments of Islamic finance were later adopted by European finances and businessmen, he said.

It is estimated that Islamic Banking is growing at a rate of 10-15 percent per year and with signs of consistent future growth. It is understood that Islamic banks have more than 300 institutions spread over 51 countries, plus an additional 250 mutual funds that comply with the Islamic principles, the ICCB President added.

He stated that Islamic banking is now an issue of great interest for many including Western non- Muslims, because the system still remains almost unhurt by the onging global financial crisis. The Islamic banking industry in Bangladesh also continues to show strong growth since its inception in 1980's.

At present, out of 48 banks, 8 private commercial banks are operating as full- fledged Islamic banks. Besides, 21 branches of 10 conventional banks including 2 foreign banks are engaged in Islamic banking, he mentioned.

Chairman of ICCB Standing Committee on Banking Technique and Practices Mamun Rashid Said, besides its wide geographical scope, the expansion of Islamic finance has also been taking place across the whole spectrum of financial activities, ranging from retail banking to insurance and capital market investments. He observed that the global financial turbulence appears to have had a limited impact on the Islamic finance industry, which has been in an expansionary phase in recent years.

Iqbal Ibrahim Karmally, coordinator of ICC UAE Banking Commission and Head of Trade Finance at Sharjah Islamic Bank who conducted the workshop also spoke at the inaugural session. As many as 63 participants from different banks attended the workshop.

(The New Nation)

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