Islamic banking on growth path, says expert

MUSCAT: The Islamic banking system now mushrooming throughout the world will continue to grow to the point of becoming a parallel financial system for investors seeking an alternative to the existing global interest-based capital market dominated by Western banks, a top Islamic banking expert said.

“With more countries racing to take a share in the booming takaful industry (Islamic insurance) which is expected to reach $25 billion globally by 2015, it is a good idea and needs to be explored further,” Professor Abu Nasser Mohammed Abduz Zaher, Islamic Bank Bangladesh Ltd (IBBL) chairman, told Times of Oman.

The chairman, currently on a visit to the Sultanate, was all praise for Oman and its ruler His Majesty Sultan Qaboos bin Said for permitting Islamic-based financial instruments to operate in Oman.

“On behalf of Bangladesh and the Islamic Bank Bangladesh, we would like to express our highest appreciation for His Majesty the Sultan for the developments taking place in the country and especially to the bold decision to permit Sharia-compliant financial institutions,” he said.

“We are confident that with the level of education and government’s wisdom coupled with deep-rooted culture based on Islam, we believe the decision is absolutely correct and time is opportune for Oman to get into Islamic mode of banking,” he added.

Offering support to Oman the chairman said, “The Jeddah-based Islamic Development Bank (IDB), being our central bank globally, has referred our bank for providing expertise to countries like Nigeria and Uganda to train their Islamic banking employees.

If we are asked for help from Oman, we are more than willing to play a role with our vast experience in the domain of Sharia-compliant banking provisions.”

The chairman said that the establishment of Islamic Bank in Bangladesh was a boon for the people of the country as the bank has earned the confidence of the businessmen, industrialists and general people. People have reposed total confidence on the truth and efficiency of Islamic bank.

Today, the Islamic banks are fast penetrating into every nook and corner of the country and even conventional banks have opened Islamic windows and exclusive Sharia-compliant branches because the people of Bangladesh are convinced that the future lies in Sharia-compliant institutions.

Regarding the bank’s business in Bangladesh, he said that the IBBL has opened 10 new branches by the end of November this year, taking the total number of branches to 261.

It also plans to gradually open more branches covering important economic and commercial places both in urban and rural areas. Islamic Bank Bangladesh Limited is rated by Credit Rating Information and Services Limited (CRISL).

Professor Abu Nasser is so confident of the further growth of the bank that he said, “The trust is so much that people deposits money in Islamic Bank Bangladesh without any second thoughts and henever we open a branch in a town, average deposit on the first day of the opening would register around four million takas.”

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