Muslim Nations Plan to Set Up Islamic Bank - Yahoo! News
Muslim Nations Plan to Set Up Islamic Bank - Yahoo! News
PUTRAJAYA, Malaysia - Muslim bankers and regulators announced plans Wednesday to set up a global Islamic bank by next year that could rival Western lenders and to chart a 10-year blueprint to bolster growth in the Islamic financial sector
The Bahrain-based Albaraka Banking Group will take a 10 percent stake in the $1 billion bank to be known as the Emaar International Group, said Saleh A. Kamal, chairman of the General Council for Islamic Banks and Financial Institutions, which proposed the project.
Other key shareholders are the Islamic Development Bank, which is the financial arm of the 57-nation Organization of Islamic Conference, and Malaysia's Islamic Bank, Kamal said.
"We hope by early next year, it will be operational," he told some 400 officials and regulators at a forum in Malaysia to map out a blueprint for the Islamic financial sector.
Malaysia is spearheading efforts to help the OIC focus on economic development among Muslim nations to help lift them out of poverty and boost their financial clout.
Malaysia, Bahrain, Qatar or Dubai could be the host country for the new bank, Kamal said, adding that operational details are expected to be finalized in three months.
Officials have said the bank will operate in keeping with Islamic laws, which means no interest would be paid or charged on deposits and loans.
Kamal said the bank's emergence could be a "vital turning point" for a sector whose growth has been hamstrung because 73 percent of some 285 Islamic banks and financial institutions are undercapitalized at below $25 million.
Membership in the Emaar group is open to private Islamic and conventional banks, pension, insurance and endowment funds, as well as individuals, he said.
Malaysia's central bank also said Wednesday it has no immediate plans to issue more Islamic banking licenses to foreign lenders. Last year, the central bank granted Islamic banking licenses to three foreign companies — Kuwait Finance House, Saudi Arabia-based Ar-Rajhi Bank and a consortium led by Qatar Islamic Bank.
Foreign investors can still enter Malaysia's market by holding a 49 percent stake in subsidiaries of domestic banks that offer Islamic banking.
The Islamic Financial Services Board secretary-general Rifaat Ahmad Abdel Karim told the Associated Press that a 10-year Islamic financial services master plan for OIC nations is expected to be completed by the end of the year and distributed to various regulatory bodies.
Malaysian Prime Minister Abdullah Ahmad Badawi, whose country currently chairs the OIC, told the forum that the masterplan would promote widespread development to "address the problems of extremism and terrorism" in the world's largest Muslim political grouping.
Twenty-seven OIC members are classified by the World Bank as low-income nations while 21 are severely indebted, he said.
PUTRAJAYA, Malaysia - Muslim bankers and regulators announced plans Wednesday to set up a global Islamic bank by next year that could rival Western lenders and to chart a 10-year blueprint to bolster growth in the Islamic financial sector
The Bahrain-based Albaraka Banking Group will take a 10 percent stake in the $1 billion bank to be known as the Emaar International Group, said Saleh A. Kamal, chairman of the General Council for Islamic Banks and Financial Institutions, which proposed the project.
Other key shareholders are the Islamic Development Bank, which is the financial arm of the 57-nation Organization of Islamic Conference, and Malaysia's Islamic Bank, Kamal said.
"We hope by early next year, it will be operational," he told some 400 officials and regulators at a forum in Malaysia to map out a blueprint for the Islamic financial sector.
Malaysia is spearheading efforts to help the OIC focus on economic development among Muslim nations to help lift them out of poverty and boost their financial clout.
Malaysia, Bahrain, Qatar or Dubai could be the host country for the new bank, Kamal said, adding that operational details are expected to be finalized in three months.
Officials have said the bank will operate in keeping with Islamic laws, which means no interest would be paid or charged on deposits and loans.
Kamal said the bank's emergence could be a "vital turning point" for a sector whose growth has been hamstrung because 73 percent of some 285 Islamic banks and financial institutions are undercapitalized at below $25 million.
Membership in the Emaar group is open to private Islamic and conventional banks, pension, insurance and endowment funds, as well as individuals, he said.
Malaysia's central bank also said Wednesday it has no immediate plans to issue more Islamic banking licenses to foreign lenders. Last year, the central bank granted Islamic banking licenses to three foreign companies — Kuwait Finance House, Saudi Arabia-based Ar-Rajhi Bank and a consortium led by Qatar Islamic Bank.
Foreign investors can still enter Malaysia's market by holding a 49 percent stake in subsidiaries of domestic banks that offer Islamic banking.
The Islamic Financial Services Board secretary-general Rifaat Ahmad Abdel Karim told the Associated Press that a 10-year Islamic financial services master plan for OIC nations is expected to be completed by the end of the year and distributed to various regulatory bodies.
Malaysian Prime Minister Abdullah Ahmad Badawi, whose country currently chairs the OIC, told the forum that the masterplan would promote widespread development to "address the problems of extremism and terrorism" in the world's largest Muslim political grouping.
Twenty-seven OIC members are classified by the World Bank as low-income nations while 21 are severely indebted, he said.
posted by LD at 2:00 PM
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